Meta (META) being coy about future AI spending isn't what the market wants to hear as overspending fears rattle tech stocks.
Yet that's what the market got — and Meta received another earnings day stock plunge in return. The move is likely to keep dark clouds over the stock through the summer.
"We aren't providing a specific outlook for 2027 capex at this time," Meta CFO Susan Li told analysts on a late-Wednesday earnings call.
Meta did raise the bottom end of its 2026 capital expenditure target, tightening the full-year spending range to $135 billion to $145 billion (up from $125 billion to $145 billion).
But specifics about 2027 capital expenditures were nonexistent.
Li added, "Infrastructure planning remains highly dynamic. Even this year, there are a range of outcomes embedded in our outlook."
Meta stock plunged 10% in early trading on Thursday. The drop brings Meta's stock down close to 30% year to date.
All in all, not the reaction Meta and billionaire CEO Mark Zuckerberg wanted.
The tech giant actually delivered a top-line beat, pulling in $60.8 billion in revenue versus the $60.2 billion analysts were looking for. But here's where the narrative got really messy: Meta completely whiffed on the bottom line, turning in an EPS of $6.18 compared to the consensus estimate of $7.14.
The earnings miss was almost entirely driven by a $2.4 billion hit for legal contingencies alongside a $1.2 billion severance charge.
On the legal charges, Li said, "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 U.S., which may ultimately result in a material loss."
Looking ahead, the third quarter revenue guidance of $61 billion to $64 billion came in slightly light compared to the $63.1 billion Wall Street wanted.
"Meta alluded to medium-term capex growth and issued 3Q guidance that was roughly in line with the Street, which feeds into AI bear concerns on overbuilding and ROIC," KeyBanc analyst Justin Patterson said in a note.
Brian Sozzi* is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.*
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