Meta Stock Loses $214 Billion in Market Cap in Biggest Single-Day Decline in 3 Years

Meta predicted 2026 will see ‘notably larger’ capital expenditure growth in dollar terms compared to this year.

Technology company Meta Platforms at a booth during the AI+Expo Special Competitive Studies Project in Washington on June 2, 2025. Madalina Vasiliu/The Epoch Times

Meta shares dropped by more than 11 percent on Oct. 30, registering its largest single-day drop in three years, after the company’s third-quarter earnings release showed higher spending on computing requirements, including for artificial intelligence (AI).

On Wednesday, Meta reported revenues of $51.2 billion for the third quarter ending Sept. 30, up 26 percent from the same period last year. However, costs grew by a larger magnitude, increasing by 32 percent to reach $30.7 billion.

The company predicted capital expenditure for 2025 overall to be in the range of $70 billion to $72 billion, up from its previous estimate of $66 billion to $72 billion.

During an Oct. 29 earnings call, Meta CFO Susan Li attributed the 32 percent jump in costs to three factors—higher legal-related expenses; acceleration in employee compensation, particularly in AI; and higher infrastructure costs, including increased expenditure associated with “expanded data center fleet.”

On Oct. 15, the company announced breaking ground on an AI-focused data center in El Paso, Texas, capable of scaling up to 1 gigawatt to support the company’s “growing AI workload.”

On Oct. 21, Meta announced it was partnering with Blue Owl Capital to develop a data center campus in Richland Parish, Louisiana.

“As we have begun to plan for next year, it has become clear that our compute needs have continued to expand meaningfully,” the company said in its earnings release.

“We expect to invest aggressively to meet these needs both by building our own infrastructure and contracting with third-party cloud providers. We anticipate this will provide further upward pressure on our capital expenditures and expense plans next year.”

Meta predicted 2026 will see “notably larger” capital expenditure growth in dollar terms compared to this year.

In addition, total expenses incurred by the company are expected to “grow at a significantly faster percentage rate” next year, driven largely by infrastructure and employee compensation costs, specifically AI talent, it said.

Meanwhile, Meta’s Reality Labs, a division responsible for the company’s virtual reality and augmented reality initiatives, registered a loss of $4.4 billion in the third quarter, roughly similar to the losses suffered in the third quarter last year.

On Oct. 29, Meta shares closed at around $751. On Oct. 30, shares closed at roughly $666, an 11.3 percent drop. The company’s market cap fell by $214 billion, according to the financial research platform Macrotrends.

During the earnings call, Meta CEO Mark Zuckerberg justified the company’s large investments in its AI initiatives, citing the need to be prepared for superintelligent AI.

“There’s a range of timelines for when people think that we’re going to get superintelligence. Some people think that we’ll get there in a few years, others think it'll be 5, 7 years, or longer. I think it’s the right strategy to aggressively front-load building capacity so that way we’re prepared for the most optimistic cases,” he said.

“That way, if superintelligence arrives sooner, we will be ideally positioned for a generational paradigm shift and many large opportunities. If it takes longer, then we'll use the extra compute to accelerate our core business.”

More than 1 billion people worldwide use Meta AI every month, according to the company.

Meanwhile, Zuckerberg’s net worth has dropped this year. On Feb. 15, his net worth was $254.1 billion, according to data from Forbes. He was the second richest person in the world at the time. As of Oct. 31, however, the Meta CEO’s net worth has declined by more than $25 billion to $228.5 billion, dropping him to fifth place on the world’s richest list.

AI Market Bubble

There are growing concerns about the risk posed by AI exposure of big tech companies to the economy and investors.

In a Sept. 24 analysis, Michael Cembalest, chair of JP Morgan’s Investment Strategy Group, said that AI-affiliated stocks accounted for 75 percent of all returns in the S&P 500 index since the launch of ChatGPT in 2022. These stocks accounted for 80 percent of earnings growth and 90 percent of capital spending.

The last time the stock market became so highly concentrated was during the dot-com bubble in 2000, when just 10 companies made up 27 percent of the S&P 500, and tech companies accounted for 47 percent of the index by market capitalization. When the bubble burst, roughly $5 trillion in market value got erased as the S&P crashed 49 percent from its peak.

During an Oct. 30 press conference, Federal Reserve Chairman Jerome Powell stated that the growth in AI investment spending was not comparable to the dot-com bubble of the 1990s.

“This is different in the sense that these companies, the companies that are so highly valued, actually have earnings and stuff like that,” he said.

“The investment we’re getting in equipment and all those things go into creating data centers and feeding the AI, it’s clearly one of the big sources of growth in the economy.”