Meta Shares Plunge Amid AI Spending Surge

Meta shares fell up to 11% after quarterly results showed revenue grew 28% to $61bn but profits dropped 14% to $6bn. The company raised its annual spending forecast to $130-145bn, mostly on AI, leaving free cash flow at its lowest point in five years. CEO Mark Zuckerberg defended the investment, saying AI is accelerating core business and that Meta plans to sell AI tools to other companies. Analysts drew comparisons to Meta's costly metaverse failure, questioning whether the spending represents diversification or distraction. Microsoft, by contrast, saw shares rise 5% after posting stronger profits alongside its own heavy AI investment.