Meta Platforms has projected higher capital spending next year as the company doubles down on artificial intelligence (AI) and data centre expansion, even as a massive one-time tax charge dragged down its third-quarter profit.
The tech giant, which owns Facebook, Instagram, and WhatsApp, reported revenue of $51.24 billion for the third quarter of 2025, a 26% increase from a year earlier and above Wall Street’s expectations.
But costs rose faster, climbing 32%, and a $15.93 billion charge linked to U.S. President Donald Trump’s “Big Beautiful Bill” slashed net income to $2.71 billion. Without that charge, Meta’s adjusted earnings would have been $18.64 billion.
Despite the strong revenue growth, Meta’s shares dropped 8% in after-hours trading as investors reacted to CEO Mark Zuckerberg’s plans to scale up spending on AI infrastructure, a move that could pressure profit margins in the near term.
Zuckerberg told analysts that Meta intends to “aggressively front-load building capacity,” arguing that it’s the right strategy to be ready for faster-than-expected breakthroughs in AI.
“There’s a range of timelines for when people think that we’re going to get superintelligence,” he said. “I think that it’s the right strategy to aggressively front-load building capacity, so that way we’re prepared for the most optimistic cases.”
The company has launched an initiative called Meta Superintelligence Labs, formed in June, to drive its AI goals. Zuckerberg said the unit already has “the highest talent density in the industry,” and Meta is among the top buyers of Nvidia’s sought-after AI chips. “We’re also building what we expect to be an industry-leading amount of compute,” he added.
Meta company now expects to spend between $70 billion and $72 billion this year, up from an earlier estimate of $66 billion to $72 billion, and says next year’s capital expenditure will be “notably larger.”
Much of this increase will go toward expanding data centre capacity and hiring AI specialists, according to CFO Susan Li, who confirmed employee compensation will be a key cost driver in 2026.
Meta’s aggressive approach comes as Big Tech firms like Microsoft, Alphabet, Amazon, and OpenAI are all scaling up their compute capabilities to support advanced AI models.
OpenAI’s CEO, Sam Altman, said earlier this week that he hopes the company will one day be able to “add 1 gigawatt of compute every week,” and that could cost upwards of $40 billion per gigawatt.
This ballooning investment across the tech sector has led to talks of a possible “AI bubble,” with analysts warning that spending may outpace returns. “Meta’s earnings reveal the growing tension between the company’s massive AI infrastructure investments and investor expectations for near-term returns,” said Jesse Cohen, senior analyst at Investing.com.
Still, Meta’s core business stays strong. Its AI-driven advertising systems are performing well, with tools that automate campaigns, create persona-based images, and enhance video ad quality for over 3.5 billion daily users across its platforms.
The company’s expanding ad offerings on WhatsApp and Threads, and sustained growth in Instagram Reels, have strengthened its competitiveness with the likes of TikTok, YouTube Shorts, and Elon Musk’s X.
“While everyone else is still pitching AI moonshots, Meta has quietly turned AI into margin,” said Jeremy Goldman, senior director at Emarketer. “Its ad tools are sharper, its targeting smarter, and its short-form video business is finally paying off.”
For the fourth quarter, Meta expects revenue between $56 billion and $59 billion, slightly above analysts’ projections.
