Facebook parent company Meta Platforms reported quarterly earnings below Wall Street expectations, as heavy investments in artificial intelligence (AI) infrastructure, along with legal expenses and severance costs, affected its financial performance.
The technology company reported a 14% decline in net income compared with the previous year, with profits falling to $15.8 billion. The results raised concerns among investors about the financial impact of Meta’s aggressive AI spending strategy.
Unlike many major technology companies, Meta’s large-scale AI investments have significantly affected its cash position. The company’s free cash flow declined sharply to $784 million, compared with $8.5 billion during the same period a year earlier.
Despite the weaker-than-expected results, Meta has continued to prioritize AI development, investing heavily in computing infrastructure, advanced models, and talent to compete in the rapidly expanding artificial intelligence sector.
Following the earnings announcement, Meta shares fell by as much as 12% in after-hours trading, reflecting investor concerns over rising costs and uncertainty about the returns from the company’s AI investments.
The company has maintained that its AI strategy remains central to its long-term growth plans, as competition intensifies among global technology firms to build advanced AI systems.
