Meta shares slide on spiralling AI costs and lower profits
Meta shares fell by up to 11 per cent on 29 July 2026, following a quarterly report revealing a decline in profit. Investor concerns were compounded by the company's decision to increase its heavy investment in AI.
What happened?
Meta shares dropped by as much as 11 per cent in extended trading on 29 July 2026. This followed the release of the company's second-quarter results, which showed a 14 per cent profit decline to USD 6 billion, despite an increase in revenue. The company also raised its forecast for annual capital expenditure to between USD 130 billion and USD 145 billion.
Key facts
| Kursfall i efterhandeln | Upp till 11% |
|---|---|
| Investeringsprognos 2026 | 130–145 mdr USD |
| Vinst Q2 2026 | 6 mdr USD (-14%) |
| Omsättning Q2 2026 | 61 mdr USD (+28%) |
”accelerating every part of our core business”
”By 2028, we'll have turned over a lot of cards”
Why it matters
The share price decline is partly attributed to investor anxiety over rapidly rising AI costs, compounded by falling profits and delays in generating commercial revenue from AI projects. However, Meta maintains that its AI initiatives are strengthening its core business, and CFO Susan Li indicated that returns on these investments are expected to become clearer by 2028.
Who is affected?
Shareholders and investors are facing an immediate impact from the stock decline and narrowing profit margins. In the long term, corporate clients and users may also be affected as Meta moves to commercialise its AI models and offer the technology to external companies.
Impact on the EU
Investments in AI infrastructure encompass Meta's global operations, including the expansion of data centres and services within the EU. The company must simultaneously navigate an increasingly stringent EU regulatory landscape concerning data protection and the AI Act.
What else you should know
Meta reported a 28 per cent revenue increase to USD 61 billion for the second quarter of 2026. The 14 per cent decline in profit is attributed to a combination of increased capital expenditure on AI and higher operating expenses across the company's other divisions.
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