{"slug": "meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street", "title": "Meta shares tumble 10% as Mark Zuckerberg’s AI spending spree stuns Wall Street", "summary": "Meta Platforms reported a 91% drop in second-quarter free cash flow to $784 million, down from $8.55 billion a year earlier, sending shares down 10% in extended trading as CEO Mark Zuckerberg's AI spending spree stunned Wall Street. The company raised its 2026 capital expenditure forecast to between $130 billion and $145 billion, while revenue jumped 28% to $60.8 billion. Meta also faces legal risks, including four states seeking $1.4 trillion in penalties over youth addiction claims.", "body_md": "# Meta shares tumble 10% as Mark Zuckerberg’s AI spending spree stuns Wall Street\n\nBy\n\nReuters\n\nPublished\nJuly 29, 2026, 6:40 p.m. ET\n\nSee more of our coverage in your search results.\n\n[Add The New York Post on Google](https://www.google.com/preferences/source?q=nypost.com)\n\nMeta Platforms reported a precipitous 91% drop in second-quarter free cash flow on Wednesday, underscoring the financial strain of the [social media giant’s costly AI buildout](https://nypost.com/2026/07/29/business/metas-mark-zuckerberg-blasts-ai-centralization-opposes-us-ban-on-chinese-models/) despite an uncertain payoff.\n\nThe Facebook parent company reported free cash flow of $784 million in the second quarter ended June 30, down from $8.55 billion reported a year earlier, sending its shares down 10% in extended trading.\n\nMeta’s cash flow wipeout echoed Alphabet’s, which [last week said it was cash flow negative](https://nypost.com/2026/07/23/business/alphabet-and-tesla-shares-plunge-as-runaway-ai-spending-spooks-investors/) for the first time ever as it spent $5.9 billion in the second quarter. The rate of spending stunned even the most bullish of Wall Street investors, driving Alphabet’s stock down.\n\nMeta’s revenue jumped 28% to $60.8 billion in the quarter, the quickest pace of growth since the fourth quarter of 2021, barring the first quarter of 2026.\n\n“We expect that a significant portion of our compute is going to go towards training our models, growing our core business and delivering personal agents and new products, but we also expect to grow a large business serving large customers as well,” CEO Mark Zuckerberg said on an earnings call.\n\nMeta currently has 32 data centers across the globe in operation or under construction, with 28 of them in the US.\n\nThe company also raised the lower end of its capital expenditure outlook. It now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion. At the beginning of the year it had forecast capex between $115 billion and $135 billion.\n\nThe feverish spending by Big Tech is expected to reach well above $700 billion this year, primarily on AI, while Morgan Stanley has pegged the estimated spend at more than $1 trillion for the next year.\n\n“Meta’s report echoes what we saw from Alphabet and Tesla last week: strong revenue growth, but even faster growth in spending. The market is repricing a deteriorating free cash flow outlook, and in an environment of higher capital costs, that does not sit well,” said Thomas Monteiro, senior analyst at Investing.com.\n\nLuke Stillman, a managing director at research firm Madison and Wall, said: “Meta’s underlying ad business that’s financing everything though is still performing well and is our main focus.”\n\n## Meta’s legal troubles\n\nWhile investors are scrutinizing Meta’s AI spending, it faces legal risks related to its core business. The company said in a court filing this month that four states [were seeking $1.4 trillion in penalties](https://nypost.com/2026/07/07/business/meta-says-its-facing-1-4t-in-penalties-in-teen-mental-health-case-sum-equal-to-tech-giants-valuation/) over accusations it designed its Facebook and Instagram platforms to addict young users and misled the public about their safety.\n\nMeta had warned in April that legal and regulatory blowback in the European Union and the US over youth social media issues “could significantly impact” its business and financial results.\n\nThe company said on Wednesday that it continued to see this scrutiny.\n\nOn the call, Meta CFO Susan Li said second-quarter operating income would have increased 9% year over year without the company’s legal charges and severance expenses. Operating income actually fell 8%.\n\n“We continue to see scrutiny on youth-related issues in several markets and have a number of youth-related trials scheduled for this year in the US, which may ultimately result in a material loss,” she said in the company’s earnings statement.", "url": "https://wpnews.pro/news/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street", "canonical_source": "https://nypost.com/2026/07/29/business/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street/", "published_at": "2026-07-29 22:40:15+00:00", "updated_at": "2026-07-29 22:57:45.482359+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-policy"], "entities": ["Meta Platforms", "Mark Zuckerberg", "Alphabet", "Tesla", "Morgan Stanley", "Investing.com", "Madison and Wall", "Susan Li"], "alternates": {"html": "https://wpnews.pro/news/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street", "markdown": "https://wpnews.pro/news/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street.md", "text": "https://wpnews.pro/news/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street.txt", "jsonld": "https://wpnews.pro/news/meta-shares-tumble-10-as-mark-zuckerbergs-ai-spending-spree-stuns-wall-street.jsonld"}}