Meta Faces Investor Skepticism Over Massive AI Spending Despite Revenue Growth

Meta Platforms Inc. came under pressure after releasing a mixed second-quarter earnings report that raised investor concerns about the company's aggressive artificial intelligence (AI) spending, Nate Wolf reported for Barron's Daily.

Meta continues investing heavily in artificial intelligence despite growing investor concerns over rising costs. [Image: Instagram]

Second-quarter revenue rose 28 percent year over year to a record US$60.8 billion, exceeding analysts' expectations as AI-driven improvements continued to strengthen Meta's advertising business.

However, earnings fell short of expectations. Earnings per share declined to US$6.18 from a year earlier, reflecting a US$2.4 billion legal charge.

Meta also recorded US$1.2 billion in severance costs related to recent layoffs, while research and development expenses surged 67 percent year over year.

The company raised the lower end of its 2026 capital expenditure guidance and now expects to spend between US$130 billion and US$145 billion this year.

Chief Financial Officer Susan Li declined to provide capital spending guidance for 2027.