Meta Shares Slide Again as AI Spending Fears Mount Ahead of Third-Quarter Earnings Report Next Wednesday

NEW YORK — Shares of Meta Platforms fell more than 2% on Friday, extending a pullback this week as investors weighed concerns about the company's soaring artificial intelligence spending ahead of its quarterly earnings report next week.

Meta shares were down $16.68, or 2.26%, at $720.04 as of 12:17 p.m. Eastern time on the Nasdaq.

The decline follows a 3.27% drop on Wednesday, when the stock closed at $737.54, and a small loss on Thursday. Meta had traded as high as $779.82 over the past 52 weeks and remains well above its low of about $520.

Spending concerns

Investor anxiety has centered on how much Meta will spend on AI infrastructure in the coming years.

On Wednesday, Guggenheim analyst Michael Morris raised his estimate for Meta's 2027 capital spending to $225 billion from $203 billion, according to Barron's. The figure is the analyst's own estimate rather than company guidance, but it highlighted the scale of investment Meta may need to compete in AI.

Goldman Sachs also lowered its price target on Meta to $762 from $860, citing concerns about rising operating expenses and AI investment costs, while maintaining a Buy rating.

Not all analysts are cautious. UBS and Guggenheim raised their price targets this week, pointing to potential revenue from AI-powered business agents, messaging monetization on WhatsApp and Messenger and AI-driven advertising automation. Citi raised its target to $895 from $800 and kept a Buy rating ahead of earnings.

Analysts overall have a consensus Moderate Buy rating, with an average price target of about $802, according to MarketBeat.

Tech sell-off weighs

Meta's decline comes amid a broader sell-off in AI-related stocks. Hotter-than-expected U.S. inflation data this week raised the possibility of further interest rate increases, while concerns about debt-fueled spending on AI infrastructure have weighed on technology shares.

Twenty of the world's most valuable AI and semiconductor companies lost more than $1 trillion in market value earlier this week, according to CNBC.

Insider sale

Chief Operating Officer Javier Olivan sold about $1.15 million of Meta shares this week under a prearranged trading plan adopted in November 2025, according to regulatory filings. Such plans allow executives to sell shares on a predetermined schedule.

Earnings ahead

Meta is scheduled to report third-quarter results on Oct. 21. Investors will focus on advertising revenue growth, the company's capital spending plans for 2027 and evidence that its AI investments are generating returns.

A year ago, Meta's shares fell sharply after the company warned that capital spending and expenses would grow significantly faster in 2026, a reminder of how sensitive investors are to spending guidance.

Analysts say a strong earnings report showing improving returns from AI-driven advertising, combined with spending growth that is slower than feared, could help the stock recover. A larger-than-expected spending forecast, however, could add to pressure on the shares.