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Meta misses earnings forecasts after Zuckerberg media push to promote AI
Meta's share price fell almost 8% after the company reported weaker-than-expected second-quarter earnings, despite a media blitz by chief executive Mark Zuckerberg in the days beforehand promoting the benefits of artificial intelligence. The disappointing results undercut Zuckerberg's efforts to reassure investors and the public that Meta's enormous AI spending is justified, at a time when the firm's share price is already down 10% over the past year amid growing scepticism about the returns on that investment.
Meta posted earnings of $6.18 per share, well below the $7.14 Wall Street had expected, though revenue of $60.8bn beat forecasts of $60.23bn. The firm raised its expected costs for the year, partly due to $2.4bn in legal-related charges, pushing total expenses to a range of $165bn–$169bn, and lifted its 2026 capital expenditure forecast to $130bn–$145bn, much of it earmarked for AI infrastructure. Zuckerberg had used a Wall Street Journal op-ed and interviews with the New York Times and Financial Times to champion a vision of "personalised super-intelligence" for everyone, while analysts, including Forrester's Mike Proulx, questioned whether Meta was "trying to do too much at once" across its various AI ventures.
In short
- Meta shares fell nearly 8% on weaker-than-expected quarterly earnings.
- Zuckerberg's pre-earnings AI PR push failed to reassure investors.
- Meta raised 2026 capital spending forecast to $130bn–$145bn.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Meta’s heavy AI investment could build valuable infrastructure and products that strengthen its business over time, even if the payoff is not yet visible in quarterly earnings. Zuckerberg’s public case for “personalised super-intelligence” may help explain the strategy to investors, while higher revenue than forecast suggests the company still has substantial commercial strength.
The case against
The earnings shortfall and rising cost forecasts give investors reason to question whether Meta’s AI spending is producing returns commensurate with its scale. With capital expenditure projected to reach as much as $145bn in 2026 and several AI ventures competing for resources, the company may be taking on costs and execution risks before it has shown a clear path to value.
Explained simply
Meta, the technology company owned by Mark Zuckerberg, is making significant investments in artificial intelligence, spending tens of billions of pounds annually on AI infrastructure and research. The company believes AI will make its products more valuable and open up new business opportunities.
Investors have become uncertain about whether these enormous costs will generate adequate returns, as there is limited evidence so far that customers or advertisers are significantly benefiting from Meta's AI work. This has raised questions about whether the investment spending is justified.
Meta's financial performance has become central to determining whether the AI strategy will be judged a success. The company is under pressure from investors to demonstrate that its costly AI investments are translating into improved profitability.
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