Meta gives lacklustre quarterly sales forecast; shares drop

Meta Platforms gave a disappointing revenue forecast of US$61 billion to US$64 billion for the third quarter, with the mid line below the average analyst estimate of US$63.2 billion, intensifying investor concerns about its unprecedented spending on artificial intelligence. Shares fell about 6.2% in after-hours trading after closing at US$585.61 on Wednesday in New York. The company narrowed its full-year capital expenditure forecast to US$130 billion to US$145 billion and faces additional expenses including US$2.4 billion in legal penalties.

Meta gives lacklustre quarterly sales forecast; shares drop Q3 revenue will be US$61 billion to US$64 billion, the company says META Platforms gave a disappointing revenue forecast for the current quarter, intensifying investor concerns about the social media giant’s unprecedented spending on artificial intelligence. The company said third quarter revenue will be US$61 billion to US$64 billion, with the mid line of that range below the average analyst estimate of US$63.2 billion, according to data compiled by Bloomberg. Meta relies on its advertising business to finance its expensive bets on AI products and infrastructure, including data centres and AI-powered glasses https://www.businesstimes.com.sg/lifestyle/style-society/meta-ai-glasses-review-stellar-sound-sharp-recording-subject-none-wiser . Investors have questioned how Meta will ultimately recoup its AI investments, and balked earlier this year when chief executive officer Mark Zuckerberg increased projected spending to as much as US$145 billion. Meta on Wednesday Jul 29 narrowed its full year capital expenditure forecast to US$130 billion to US$145 billion, slightly lifting the bottom end from a previous projection of US$125 billion to US$145 billion. Meta shares fell about 6.2 per cent in after-hours trading after closing at US$585.61 on Wednesday in New York. The stock has declined 11 per cent so far in 2026. Meta is spending hundreds of billions to compete against American tech rivals, including Alphabet, OpenAI and Anthropic, in a race to develop leading AI models and products. It has struggled at times to convince investors that it will someday bring in enough sales and profit to justify that spending. The company has announced several new AI-related business lines in recent months, including a consumer chatbot subscription and a pay-to-use AI model for developers. Meta is one of the tech industry’s heaviest spenders when it comes to AI data centres, just this week announcing a partnership with BlackRock on a US$14 billion complex in El Paso, Texas https://www.businesstimes.com.sg/companies-markets/blackrock-raises-us12-5-billion-debt-meta-data-centre . It is building another data centre in rural Louisiana that is expected to cost upwards of US$250 billion. Much of its investment is fueled by advertising that Meta runs on its flagship social networking products, Facebook and Instagram. Meta reported revenue of $60.8 billion for the quarter ended June 30, slightly above the $60.3 billion that analysts projected. “Meta’s strong revenue growth will once again be overshadowed by its capital expenditure projections,” wrote Minda Smiley, a senior analyst at Emarketer. “Even though Meta didn’t raise projections, that won’t stop investors from pressing for more information regarding plans for a potential computing business – and any other details on how Meta is thinking about monetising AI.” The company is also facing other expenses. It narrowed its full-year expense outlook Wednesday to US$165 billion to US$169 billion, a jump meant to incorporate US$2.4 billion in penalties related to legal proceedings, according to a company filing. Thousands of individuals and US school districts are suing Meta https://www.businesstimes.com.sg/companies-markets/telcos-media-tech/meta-disregarded-its-own-research-teen-harm-tennessee-tells-jury and other major social media companies over allegations that their products are addictive and harmful to minors. Earlier in 2026, a jury found Meta and Google liable for a young woman’s mental health struggles, awarding her a total of US$6 million in damages in what was considered a litmus test for thousands of similar, pending complaints. In March, Meta lost a separate case in New Mexico alleging the company failed to protect children from online predators; jurors assessed a penalty of US$375 million, which the company continues to fight. The biggest US tech firms plan to spend as much as US$725 billion this year on capital expenditures, mainly for AI infrastructure needed to build out data centres. Google parent Alphabet said last week it had raised its capital spending forecast https://www.businesstimes.com.sg/companies-markets/alphabet-hikes-spending-outlook-race-build-ai-data-centres to as much as US$205 billion in 2026, sending the stock lower. Across the board, investors have been squeamish about the companies’ AI spending, wary about where it will lead and whether it will ultimately pay off. BLOOMBERG Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free. Share with us your feedback on BT's products and services TRENDING NOW /pulse?ref=trending-now Singapore banks’ battle for wealth talent goes beyond private bankers Philippines’ income upgrade hides grim reality for most Filipinos Extra S$300 in CDC Vouchers, U-Save rebates for households as part of S$900 million support package World powers are courting Asean. Can the region capitalise on that?