Meta Platforms NASDAQ:META, a social-media and digital-advertising company, plunged approximately 9.1% in Thursday's regular-session trading as investors assessed an earnings miss and sharply weaker free cash flow. Quarterly free cash flow declined approximately 91% to $784 million from $8.55 billion one year earlier. Adjusted earnings reached $6.18 per share, below analysts' estimate of $7.22, although revenue increased 28% to $60.8 billion.
Meta raised the lower end of its 2026 capital-expenditure forecast, producing a range of $130 billion to $145 billion compared with its previous expectation of $125 billion to $145 billion. The company began the year expecting between $115 billion and $135 billion. Meta plans to operate approximately seven gigawatts of computing capacity this year and 14 gigawatts next year, with 32 data centers operating or under construction as management expands the infrastructure supporting its AI services.
Daily active users across Meta's applications increased 3% to 3.6 billion, demonstrating that its platforms continued attracting engagement despite the earnings pressure. However, the decline in free cash flow illustrates the immediate financial strain created by the infrastructure buildout, particularly as Reality Labs has accumulated more than $80 billion in operating losses. Meta forecast third-quarter revenue between $61 billion and $64 billion. Investors may now focus on whether advertising and AI-related revenue can expand quickly enough to offset infrastructure expenses and continuing losses from the company's virtual-reality operations.