Meta stock tumbles 17 percent as AI spending worries grow
Meta shares tumbled 17 percent over four days after the company projected capital expenditures reaching $72 billion this year, with even larger outlays planned for 2026. Investors drew comparisons to the firm’s previous heavy investments in metaverse technology that contributed to a major stock decline several years earlier.
Chief executive Mark Zuckerberg defended aggressive spending on artificial intelligence initiatives, including the Superintelligence Labs group, calling it necessary strategic capacity building. However, portfolio managers expressed frustration about funding projects lacking clear, immediate returns. One fund leader managing over $700 billion in assets noted shareholders were growing impatient with what seemed like a return to past overspending patterns.
Despite recent losses, the stock remains up 7.5 percent year to date. Analysts observed that while artificial intelligence holds more near-term promise than virtual reality platforms did, excessive investment without demonstrated payoffs worried markets. A Wall Street analyst recently reduced his recommendation, citing parallels between current artificial intelligence funding and prior metaverse expenditures. Microsoft also faced investor skepticism over artificial intelligence spending, though concerns proved less severe given clearer cloud computing growth visibility.
