Meta’s Stock Just Took an Unexpexted Hit. Here’s Why Investors Are Spooked.

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Meta just gave investors a preview of how expensive the AI race really is, and Wall Street isn’t thrilled. The company missed earnings estimates and issued weaker-than-expected revenue guidance, sending shares down as much as 11% after-hours, CNBC reports. The real shock is that free cash flow collapsed to $784 million this quarter, down from $8.55 billion a year earlier, as Meta pours money into AI.

Next year could be worse. Analysts expect Meta to burn through more than $20 billion in cash in 2027, based on $174 billion in projected spending. Deutsche Bank thinks that figure could reach $215 billion, and Raymond James pegs it as high as $280 billion.

What sets Meta apart from fellow big spenders Amazon and Alphabet is its lack of a backup plan. There’s no cloud business and no proven track record building new revenue streams beyond advertising. Meta’s long-term debt has ballooned to $83.7 billion, and CFO Susan Li said the company won’t reconsider its pace until “’28 and beyond.” Investors, analysts say, aren’t likely to wait that long.