Meta Shares Plunge 9% After-Hours as AI Spending Crushes Margins & Cash Flow
ivan_bezdomny · x · 2026-07-30
Meta's shares plummeted 9% in after-hours trading following its Q2 earnings report. Although revenue beat expectations by jumping 28% YoY to $60.8 billion, core profitability took a significant hit.
Surging AI spending, legal charges, and severance costs caused total expenses to skyrocket 55%. Consequently, EPS fell 13% to $6.18, and operating margin dropped from 43% to 31%. Free cash flow also collapsed to just $784 million, leaving the market stunned by the magnitude of Meta's AI infrastructure expenditures.
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