Meta Platforms Faces Investor Concerns Amid Rising AI Costs
Meta Platforms (NASDAQ: META) experienced a significant decline of 10% on July 30, capping an 11-day losing streak following its mixed Q2 2026 earnings report. The company reported sales of $60.8 billion, up 28% year-over-year, but diluted earnings per share (EPS) of $6.18 fell short of the expected $7.22. Costs surged 55% to $42 billion, leading to a drop in free cash flow to just $784 million from $8.5 billion a year prior.
This downturn has notably impacted CEO Mark Zuckerberg’s net worth, reducing it by nearly $18 billion, as he owns approximately 13% of Meta. Investors are worried about the company’s heavy artificial intelligence (AI) investments, which are expected to lead to capital expenditures of $130 billion to $145 billion in 2026, despite the absence of a cloud business that other tech giants leverage to offset such costs.
On a brighter note, ad impressions and average ad prices increased by 14% and 12% year-over-year, respectively, indicating some positive returns from AI-driven ad tools. Despite ongoing concerns, Meta’s robust balance sheet and revenue growth suggest potential long-term value for investors willing to navigate its current volatility.
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