Meta stock drops as plan to pour billions more into AI rattles investors

Meta shares slid about 7% after hours as the Facebook parent said it will boost capital spending on AI projects to as much as $145 billion, up from $135 billion, acknowledging it had underestimated compute needs. CEO Mark Zuckerberg said the company lacks a precise roadmap for scaling AI products but is confident in building a leading “Superintelligence Lab,” while signaling AI-driven productivity could shrink head count. Investors appeared more forgiving of rivals: Alphabet rose roughly 7% on a 30% profit gain and a 63% jump at Google Cloud tied to AI usage, while pledging to “significantly” raise AI outlays, including $185 billion this year—more than double 2025. Microsoft reported 16% revenue growth and a 23% profit increase, but free cash flow fell to $15.8 billion amid AI investments; management cited a $37 billion AI run rate. Amazon said profits rose 15% and AWS growth accelerated 28% on AI demand, highlighting in-house chip momentum, though it guided more cautiously for next quarter. Analysts warned the more than $650 billion AI bill across Big Tech this year continues to test investor patience as returns remain uncertain.

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