MENLO PARK, CA – Meta Platforms Inc. reported its third-quarter 2025 earnings, revealing substantial increases in operating and capital expenditures attributed to its aggressive investment in artificial intelligence infrastructure and talent. Following the earnings call, the company's share price experienced a notable decline, reflecting investor concerns regarding the scale of the spending relative to immediate revenue generation from AI initiatives.
During the quarter, Meta's operating expenses surged by $7 billion year-over-year, while capital expenditures reached nearly $20 billion. This financial outlay is part of an ongoing buildout, with reports indicating potential spending of up to $600 billion on U.S. infrastructure over the next three years. Meta CEO Mark Zuckerberg addressed analysts, stating the company's intention to "accelerate this" investment to secure necessary compute power for both AI research and core business enhancements. Zuckerberg articulated a view that new, "truly frontier models" could unlock a "massive latent opportunity." Despite these assurances, Meta's stock dropped 12% by the closing bell two days after the earnings release, resulting in a loss of over $200 billion in market capitalization.
While Meta reported a quarterly profit of $20 billion, analysts pressed for more specific details regarding the projected revenue streams from the escalating AI investments. The company did not provide a clear budget for future spending or a product-anchored revenue forecast. Currently, Meta's AI product portfolio includes the Meta AI assistant, which has surpassed one billion active users, largely leveraging its existing social platforms. Other offerings cited include the Vibes video generator, which reportedly boosted daily active users, and the Vanguard smart glasses, which are viewed by some as an extension of Meta's Reality Labs efforts rather than a core AI product utilizing large language models. Zuckerberg emphasized the anticipated impact of new models from the Superintelligence Lab, stating expectations for "novel models and novel products."
This spending trend contrasts with some industry peers. Companies such as Google and Nvidia also reported significant AI investments in Q3 but saw positive market reactions. OpenAI, for instance, generates an estimated $20 billion annually in revenue from a rapidly expanding consumer service, providing a clear revenue anchor for its substantial compute investments. Meta, which restructured its AI team approximately four months prior, faces increasing pressure to demonstrate tangible product value and clearer revenue pathways from its considerable AI expenditures.
