Business & Markets
Meta shares drop 12% after-hours as profit falls
Meta shares fell as much as 12% in after-hours trading on Wednesday after the Facebook parent reported a 14% drop in net income and reaffirmed heavy spending on artificial intelligence.
Meta said net income fell from a year earlier to $15.8 billion. Revenue rose 28% to $60.8 billion, which the company said reflected continued strength in its advertising business.
The profit decline was driven largely by one-time items, including $2.4 billion in charges tied to legal proceedings and $1.2 billion in severance from layoffs in May.
Meta said it now expects capital expenditures of $130 billion to $145 billion this year, nearly double what it spent in 2025 and slightly higher than its previous forecast. The money is being used for the data centers and chips behind its AI efforts.
“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” chief executive Mark Zuckerberg said.
Zuckerberg said those opportunities include a plan to launch a cloud computing business that would rent Meta's computing power to outside customers. He told analysts that Meta had received “quite a number of offers at a meaningful premium” over what it paid for the computing power.
Meta's Reality Labs virtual reality division posted a $4.6 billion operating loss in the quarter. The company has increasingly shifted its hardware focus toward AI-powered smart glasses.
Free cash flow fell to $784 million from $8.5 billion a year earlier as Meta continued to spend on AI infrastructure.
Meta has also faced court and regulatory battles. In March, a California jury ordered Meta and Google to pay $6 million to a 20-year-old woman who said the platforms had addicted her as a child. AFP reported that thousands of similar cases against Meta remain pending.
Update
Meta shares were down as much as 12% in after-hours trading, compared with the earlier reported fall of as much as 7%.
Meta said it now expects capital expenditures of $130 billion to $145 billion this year, slightly higher than its last forecast.
Mark Zuckerberg said Meta has received offers at a “meaningful premium” for computing power as it plans a cloud computing business.
The item adds details on legal proceedings, including a March California jury verdict ordering Meta and Google to pay $6 million to a woman who said the platforms had addicted her as a child.
The item adds analyst comment from Emarketer on Meta's AI ambitions and legal/social media concerns.
Source note: AFP news report published on 29 July 2026 at 22:06:14 UTC.
Update
Meta shares were down as much as 7% in after-hours trading.
Meta said one-time items included $2.4 billion in charges tied to legal proceedings and $1.2 billion in severance from May layoffs.
Meta expects capital expenditures of $130 billion to $145 billion this year, nearly double what it spent in 2025.
Mark Zuckerberg said AI is accelerating Meta's core business and opening new enterprise opportunities.
Reality Labs posted a $4.6 billion operating loss in the quarter.
Meta's free cash flow fell to $784 million from $8.5 billion a year earlier.
Source note: AFP news report published on 29 July 2026 at 20:58:21 UTC.
Update
Meta said net income dropped 14% from a year earlier to $15.8 billion.
Meta said revenue climbed 28% to $60.8 billion.
The item says AI spending, legal charges and severance charges hurt Meta's bottom line.
Source note: AFP news report published on 29 July 2026 at 20:33:41 UTC.
Uncertainty notes
The source says Meta's profit fell short of Wall Street expectations but does not identify the specific expectation source.
Claims in pending cases against Meta over alleged harm to children remain unresolved.
Source
AFP news report published on .