Meta Tumbles 6% on AI Spending Fears, 10-Year Yield Falls Below 5%: Stock Market Today
Key takeaways
- Meta’s higher AI spend plan sparked a tech sell‑off and pushed 10‑year Treasury yields below 5%.
- Meta’s 2026 capex forecast: $135 billion
- Meta’s Q3 free cash flow: -$2.12 billion
- Meta share drop: 6.1% to $655
What happened
Meta Platforms Inc. (NASDAQ: META) announced a higher AI spending plan, raising its 2026 capital expenditure forecast to $135 billion from $130 billion, while reporting third‑quarter revenue that beat estimates but delivered negative free cash flow of $2.12 billion. The news triggered a 6.1% drop in Meta’s stock to $655, wiping out roughly $108 billion of market value by midday. The sell‑off spread to the broader tech sector, with chipmakers and AI‑hardware names falling sharply, and pushed…
Why it matters
Investors are concerned that Meta’s increased AI spend could strain cash flow and limit future investment flexibility, especially as the company has not yet turned a profit on its AI initiatives. The broader tech sell‑off reflects fears that higher AI costs may compress margins across the sector. The dip in Treasury…
Short-term and longer-term
Short-term. Meta’s shares fell 6.1% after the AI spend hike, and the tech sector saw a sharp sell‑off, especially chipmakers.
Longer-term. The AI spending increase may strain Meta’s cash flow and affect long‑term profitability, potentially impacting its valuation.