Meta Q2 earnings recap: Stock tumbles nearly 10% after profits miss Wall Street estimates - Business Insider

What the report says

Business Insider reported that Meta’s shares fell sharply in after-hours trading Wednesday after the company’s second-quarter earnings per share came in below Wall Street expectations, even as revenue was slightly ahead of estimates. The stock was down about 9.5% by the end of the analyst call, extending an earlier slide after the results were released.

The report said Meta sought to reassure investors that its heavy artificial-intelligence spending is already strengthening its main apps and advertising business. Advertising revenue, the company’s key source of income, increased 27% to $59.36 billion, above analysts’ estimate of $59.07 billion. Business Insider also reported that ad impressions rose 14%, while the average price per ad increased 12%.

AI spending remained a central focus. Chief Financial Officer Susan Li said Meta now expects full-year capital expenditures of $130 billion to $145 billion, a narrowed range from its previous outlook and close to Wall Street’s expected $135.79 billion. On the call, CEO Mark Zuckerberg discussed buying more computing capacity, potentially selling some compute to other companies, and Meta’s work through its Superintelligence Lab.

The earnings reaction matters because investors are closely scrutinizing whether large technology companies can justify the enormous cost of AI infrastructure. Business Insider noted that Alphabet and Tesla had recently faced similar pressure after higher spending outlooks. Meta also flagged legal risks, with Li pointing to youth-related scrutiny and trials, and the company disclosing $2.40 billion in charges tied to legal proceedings.