The tech giant reported a robust 26% rise in third-quarter revenue, outpacing market expectations, but a 32% jump in total costs and a massive one-time charge dented profits, sending its shares down 8% after hours.
Meta said it took a nearly $16 billion one-time charge related to U.S. President Donald Trump’s “Big Beautiful Bill”, which sharply reduced its quarterly net income to $2.71 billion. Excluding that charge, net profit would have risen to $18.64 billion, highlighting the company’s continued financial strength despite soaring expenses.
Aggressive AI Expansion
CEO Mark Zuckerberg told analysts that Meta was “aggressively front-loading” its AI infrastructure spending to stay ahead in the global race for artificial intelligence dominance.
“There’s a range of timelines for when people think we’ll reach superintelligence,” Zuckerberg said. “It’s the right strategy to build capacity now so we’re prepared for the most optimistic cases.”
He added that if AI advances more slowly than expected, Meta would repurpose the additional computing power to accelerate its existing businesses — and if necessary, scale back infrastructure spending temporarily.
Meta has reorganized its AI operations under a new “Superintelligence Labs” division, created in June, which is now leading efforts to build cutting-edge models and computing infrastructure. The company has also embarked on a hiring spree for top AI talent, becoming one of the largest buyers of Nvidia’s high-end AI chips.
“Meta Superintelligence Labs is off to a strong start,” Zuckerberg said. “We’ve built the lab with the highest talent density in the industry and are creating what we expect will be an industry-leading amount of compute.”
Rising Costs and Capital Spending
Meta CFO Susan Li said employee compensation—especially for AI specialists—would be the second-largest driver of next year’s rising expenses. The company now projects 2025 capital expenditures between $70 billion and $72 billion, raising the lower end of its previous forecast from $66 billion.
The surge in data center construction is part of a broader trend among major AI players. Microsoft, Alphabet (Google’s parent company), Amazon, and OpenAI are all expanding infrastructure capacity at record pace. Industry analysts warn that such capital-intensive expansion could create an “AI bubble,” unless tangible returns materialize soon.
“Meta’s earnings reveal the growing tension between massive AI infrastructure investments and investor expectations for near-term returns,” said Jesse Cohen, senior analyst at Investing.com. “Rising spending on AI is weighing on sentiment despite solid underlying business performance.”
Advertising Still Dominates Revenue
Despite the spending pressures, Meta continues to leverage its enormous global user base — with over 3.5 billion daily active users across its family of apps — to drive advertising revenue.
Its AI-enhanced advertising platform allows marketers to automate and personalize campaigns, generate ad visuals using AI, and optimize targeting across languages and audiences. The company is also expanding monetization on WhatsApp and Threads, entering direct competition with Elon Musk’s X (formerly Twitter), while Instagram Reels continues to challenge TikTok and YouTube Shorts in the short-video space.
For the fourth quarter, Meta expects revenue between $56 billion and $59 billion, compared to analyst estimates of about $57.25 billion, according to data from LSEG.
Market Perspective
Analysts say Meta has regained its footing after years of uncertainty following its pivot to the metaverse.
“After a few years of existential hand-wringing, the company has found its rhythm again by doing what it does best — scaling attention and monetizing it with ruthless efficiency,” said Jeremy Goldman, Senior Director at Emarketer. “While others are still pitching AI moonshots, Meta has quietly turned AI into margin.”
Still, with Meta’s stock up 28% year-to-date, the company faces mounting pressure to show that its vast AI spending will yield measurable returns — not just technological ambition.