Creator( )Associated Press with Eleanor Butler
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Meta’s stock fell in after-hours trading on Wednesday after the tech giant reported strong third-quarter results but warned that expenses in 2026 would be significantly higher than this year.
Like its competitors, Metaplatforms said spending on artificial intelligence is skyrocketing, and that costs will rise even more rapidly next year due to infrastructure costs and employee compensation, which employs artificial intelligence professionals at eye-watering compensation levels.
“Employee compensation costs will be the second-largest contributor to growth as we allow year-round compensation for employees hired through 2025, especially AI talent, and add technical talent as a priority area,” Mehta said.
Menlo Park, California-based Meta Platforms earned $2.71 billion (2.33 billion euros), or $1.05 per share, in the July-September period. Excluding tax-related special expenses, the company’s profit was $7.25. Sales rose 26% to $51.42 billion (44.29 billion euros) from $40.59 billion (34.96 billion euros).
Analysts on average expected earnings of $6.72 per share and revenue of $49.51 billion (42.64 billion euros), according to a FactSet Research analyst survey.
Meta’s apps (Facebook, Messenger, WhatsApp, Instagram, Threads) averaged 3.54 billion daily active users in September, up 8% year over year.
For the current quarter, Meta expects revenue to be in the range of $56 billion to $59 billion (€48.23 billion to €50.81 billion). Analysts expect sales of $57.36 billion for the October-December period.
Analysts remain optimistic
Despite the share price drop, analysts weren’t as worried about Meta’s overspending as shareholders thought.
“For Meta, advertising is the foundation and AI is the growth engine,” said Debra Aho Williamson, founder and principal analyst at Sonata Insights.
“The attention to Meta’s AI-related capital expenditures is completely justified. The spend is undoubtedly significant. But with revenue up 26% in the third quarter, it’s clear that what Meta is doing to integrate AI into its advertising products is paying off.”
Meta has not said how much it expects to spend in 2026, but analysts expect it to be $97 billion (83.51 billion euros), according to FactSet.
The company expects capital spending to be in the range of $70 billion to $72 billion (€60.28 billion to €62 billion) this year, up from its previous forecast of $66 billion to $72 billion (€56.82 billion to €62 billion).
“The quarter wasn’t terrible, and the outlook remains positive. Most importantly, management confirmed that it expects advertising revenue to remain strong,” said Andrew Rocco, equity strategist at Zacks Investment Research.
Mehta also warned that it faces a number of regulatory challenges in the U.S. and European Union that could hurt its earnings.
“A number of juvenile-related trials are scheduled in the United States in 2026, which could ultimately result in significant costs,” the company said.
In the United States, Meta is facing an antitrust lawsuit awaiting a judge’s decision that could force it to separate from WhatsApp and Instagram, the startups it acquired more than a decade ago and have since grown into social media giants.
Meta’s stock price fell more than 7% in after-hours trading.