Meta stock price was down by over three per cent in pre-market trading on Thursday. Meta platforms Inc share price at Nasdaq fell to USD 676.36, down by 21.16 points or 3.03 per cent. Meta Platforms shares were down at the US stock market after investors weighed the benefits of the company's fast-growing AI agent business against the mounting costs of funding its ambitious AI expansion.
Meta stock has gained more than 5 per cent this year and, if current losses hold, is set to erase about $50 billion from the company's market value, Reuters reported.
Meta Stock
Meta shares fell despite Meta reporting stronger-than-expected quarterly revenue, forecasting fourth-quarter sales above Wall Street estimates and highlighting rapid adoption of its new AI agent app, Muse.
The earnings report came hours after a New Mexico judge ordered the company to pay a $25 billion penalty in a data-privacy case linked to Cambridge Analytica. Meta said it plans to appeal the ruling.
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Facebook, Instagram parent is spending heavily to support its AI plans, with an expected annual capital expenditure forecast between $135 billion and $145 billion. It also reported a free cash flow deficit of $2.12 billion in the third quarter, compared with positive free cash flow a year earlier.
Deutsche Bank analyst Benjamin Black said Meta's AI investments were generating stronger advertising performance and engagement, creating a "positive thesis creep" around the stock as investors increasingly view computing infrastructure as a revenue-generating asset rather than a cost burden.
Meta also announced plans to create a new class of non-voting Class C shares, giving the company additional flexibility for acquisitions and employee compensation while preserving CEO Mark Zuckerberg's voting control. At least 13 brokerages have raised their price targets on the stock after the results, according to data compiled by LSEG.