The quarter that disappointed investors
According to AI News Italia, Meta closed Thursday’s session down about 7%, its worst since July, dragging down the technology sector: Nvidia fell more than 4%, CoreWeave as much as 10%, and the Nasdaq more than 2%, with knock-on effects on Asian markets as well. Third-quarter financial results show revenue up 26% to $64.6 billion, above expectations, and 3.64 billion daily active users across the family of apps.
The critical point, however, is free cash flow, negative for the first time in more than ten years: minus $2.12 billion, versus a positive balance of $10.63 billion a year earlier. The stated cause is spending on facilities and data centers, amounting to $34.9 billion in the quarter alone, a record for the company.
Rising spending and uncertain return
The outlook does not improve according to the source material: Meta has raised its 2026 investment estimate to $135–145 billion, with future commitments recorded on the balance sheet rising to about $825 billion. It is on this point that the analysts’ statements cited by the source focus: Matthew Maley of Miller Tabak speaks of a big question about return on investment and considers it increasingly evident that it will take much longer than expected; Robert Pavlik of Dakota Wealth describes the combination of rising spending, negative cash flow and insufficient revenue as somewhat of a bottomless pit; David Morrison of Trade Nation stresses the scale of the commitments and the lack of clarity on the timing, and even the possibility, of a return.
Added to this is the capital move: the board approved a new class of non-voting shares, Class C, distributed to all shareholders and tradable from late January 2027. The stated goal is to raise capital for AI investments without diluting the founder’s control, as he holds 60.6% of votes with 13.4% of the capital. Chief Financial Officer Susan Li spoke of greater flexibility to invest in the momentum of the business, but did not announce specific financing plans.
The $25 billion ruling and market nervousness
In the same hours, according to the source, a judge in Santa Fe ordered Meta to pay $25 billion to the State of New Mexico for deceiving users about data handling in the Cambridge Analytica case, the company that accessed information from about 87 million Facebook profiles in 2016. This is the highest penalty ever imposed on the group. Judge Francis Mathew spoke of a systematic scheme of deception at the heart of the business model, while Attorney General Raúl Torrez called it an unmistakable signal to Silicon Valley. Meta announced it would appeal and called the fine a tax on speech.
The nervousness affects the entire sector: Meta’s credit default swaps have hit record levels, and the analysts cited read in the selloff a broader rethink of AI-related growth prospects. It remains to be verified how the appeal in the New Mexico case will turn out and the concrete ways in which the company intends to finance the announced investments, on which the finance leadership did not provide details.
