Meta Stock Tanks In Jittery Market On Massive AI Investme…

Meta's stock dropped over 8% after announcing plans to invest between $130 billion and $145 billion in AI for the year. Despite a 28% increase in Q2 revenue to $60.8 billion, the company missed earnings expectations and anticipates lower revenue in Q3. Ad impressions and prices rose, but investor concerns linger about the substantial AI-related expenditures versus tangible returns. CEO Mark Zuckerberg expressed optimism regarding AI's role in driving business growth, while concerns over rising interest rates and market conditions impacted tech stocks.

By Jill Goldsmith

Jill Goldsmith

Co-Business Editor

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July 29, 2026 1:44pm

Mark ZuckerbergFacebook/Getty

Meta shares plunged more than 8% in the after market as it said it plans to invest between $130 billion and $145 billion on AI this year.

The parent of Facebook, Instagram and WhatsApp also missed Wall Street’s Q2 earnings per share forecast and anticipated softer than expected revenue in the current third quarter.

Revenue for the three months ended in June, however, jumped 28% from the year before to $60.8 billion. That beat forecasts as advanced AI boosts Meta’s key digital advertising business that accounts for almost all of its sales. Ad impressions rose 14% across its family of apps and average price per ad increased 12%. But the big question investors have about Meta and others in the space is whether the ongoing massive spending on data centers and chips to build out AI capacity justifies the gains. Meta in particular is coming from behind trying to compete with OpenAI, Anthropic and Google.

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On Tuesday, it announced a venture with BlackRock to build a $14 billion data center in El Paso, Texas. It’s planning a data center in rural Louisiana center and one in Alberta, Canada. Meta began to ramp up aggressively after hiring Alexandr Wang to head its renamed Meta Superintelligence Labs in June 2025 including a $14.3 billion investment in his startup, Scale AI.

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Concerns over whether the return justifies the spending has been killing tech stocks lately. Meta was

“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” said CEO Mark Zuckerberg. “The results are already showing, and I’m optimistic about the potential ahead.

The company had 3.6 million Daily Active People (DAP), its preferred user metric, for the three months ended in June.

Meta earnings hit shortly after a press conference by new Federal Reserve chief Kevin Warsh that spooked markets. The Fed left interest rates unchanged at its July policy meeting but three of the 12 members of the Federal Open Market Committee had voted for a rate hike. Warsh said he wouldn’t hesitate to raise interest rates if inflation continues to run ahead of the central bank’s 2% target. Surging in oil prices have been driving inflation higher as the U.S.-Iran war drags on.

Higher rates could hit tech companies especially hard as they invest aggressively.

The Dow Jones Industrial Average fell over 1,000 points after Warsh spoke in its worst trading day of the year.

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Anonymous on July 29, 2026 2:55 pm

There is a real dislike towards ai besides artists. I’m not suggesting it’s the majority, but it certainly isn’t just a handful of graphic designers who are suddenly out of work.

It’s here to stay but I think all the companies are delusional about how in demand people want it.

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Anonymous on July 29, 2026 2:40 pm

At least of couple of these major players are going to lose this battle. The question is how big the fall will be. Will an Oracle be a Lehman? The bubble doesn’t mean AI won’t be around. Some players will likely be very happy years from now. But it does mean some giants will fall and leave quite a ripple.

At least the others have public products of their AI spend. So far, Meta’s massive spend is leading to… “What’s the plan, Phil?”

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