Meta’s shares fell after the company issued weaker-than-expected revenue outlook for the third quarter. The disappointing sales forecast overshadowed continued strong growth in advertising revenue and user numbers.

The company forecast Q3 revenue of US$61 billion to US$64 billion, with the midpoint of US$62.5 billion falling below expectations and signalling a potential slowdown in growth.

Stock fell between 8% and 11% in after-hours trading following the announcement. 

Meta also missed quarterly earnings expectations, despite reporting revenue growth, with AI infrastructure spending and legal costs weighing on profitability.

AI continues to be positioned as the company’s long-term growth engine under CEO Mark Zuckerberg. Company investments include generative AI models, AI assistants, smart glasses and future cloud-based AI services.

Reporting indicates investors are concerned about the scale of Meta’s AI spending. Its 2026 capital expenditure forecast was increased to between US$130 billion and US$145 billion as the company expands on data centres and AI infrastructure.

The heavy investment has significantly reduced free cash flow, raising questions about when Meta’s AI strategy will begin to deliver the expected financial returns.

Despite the lacklustre outlook, Meta continues to see growth across its lineup of apps. The company reports that the number of daily active users across Facebook, Instagram, WhatsApp and Threads reached approximately 3.6 billion.

The results match a broader trend across the technology industry lately, in which companies are investing unprecedented sums in AI infrastructure. Naturally, investors increasingly seek evidence that the large spending will translate into revenue growth and higher profits.