Meta Raises AI Spending to $145 Billion, Shares Fall 7% as Free Cash Flow Turns Negative

Meta Platforms reported its third-quarter 2026 results this week, revealing a dramatic escalation of its artificial intelligence investment programme that rattled investors. The company raised its full-year capital-expenditure guidance to between $135 billion and $145 billion, lifting the lower end of its previous range. In Q3 alone, Meta spent $34.9 billion on capital investment — exceeding its quarterly operating cash flow of $32.8 billion and turning free cash flow negative by roughly $2.1 billion, a first for the company at this scale. Revenue for the quarter rose 26% year-on-year to $64.6 billion, beating analyst estimates of $63.3 billion, and earnings per share also topped forecasts. However, the negative free cash flow and the heightened capex guidance alarmed investors, who pushed Meta's share price down approximately 7% in after-hours and next-day trading. Chief Executive Mark Zuckerberg told investors the AI strategy is working, saying investments are paying off and the core business is strong. Meta also announced a new class of nonvoting Class C shares as part of its longer-term capital structure plans. The earnings report became the proximate trigger for a broader tech sector sell-off on October 23.