Coverage spread: 2 sources — 2 center
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Meta Platforms shares fell sharply on Thursday, dropping 9% intraday and marking what would be the stock’s worst single-day performance of the year so far. The decline extended an 11-session losing streak that has erased 21.7% of the stock’s value over that stretch. The selloff was driven largely by investor unease over Meta’s decision to raise its 2025 spending forecast to $137.5 billion while declining to give any spending guidance for 2027, leaving Wall Street without clarity on how much further the company intends to invest in artificial intelligence infrastructure.
The stock rout also had a direct personal impact on Meta CEO Mark Zuckerberg, whose net worth fell by nearly $18 billion in a single day, to roughly $183.3 billion. That drop pushed him to sixth on the global rich list, just ahead of Nvidia’s Jensen Huang (about $167.2 billion) and behind Dell Technologies founder Michael Dell (about $228.9 billion).
The Numbers Behind the Selloff
Meta’s quarterly earnings came in at $6.18 per share, well short of the $7.18 consensus estimate compiled by FactSet, even though revenue of $60.8 billion beat analyst projections. The earnings miss, paired with the open-ended spending commitment, prompted a wave of price-target cuts from major research firms. Scotiabank analyst Nat Schindler lowered his target from $700 to $600, arguing that until Meta can demonstrate concrete AI revenue, investors should focus on the durability of free cash flow rather than the scale of the company’s AI ambitions. Wedbush Securities cut its target from $671 to $595, saying investors need to scrutinize whether the spending will actually generate returns. Other firms trimmed targets as well, including Evercore ISI (down $110), Wolfe Research (down $100), Goldman Sachs (down $90) and Cantor Fitzgerald (down $90).
The market’s reaction to Meta stood in sharp contrast to its response to Microsoft’s results the same week. Microsoft’s stock jumped 15% after the company reported that its Microsoft 365 Copilot AI assistant had surpassed 30 million paid users, up from 20 million in April, and posted quarterly revenue of $90 billion against estimates of $87.6 billion. Microsoft also reaffirmed its spending plans for the year and hinted at further expansion in fiscal 2027. Forrester analyst Tracy Woo said the Copilot growth and revenue beat suggested Microsoft’s data center investments were “beginning to deliver returns” — the kind of tangible payoff that Meta has yet to show.
How the Coverage Compares
MarketWatch’s headline frames the story around Meta being in “Wall Street’s doghouse,” signaling that the piece centers on the market and analyst backlash rather than Meta’s underlying business performance, though the full article text was not available for detailed comparison. Forbes takes a more personal and numbers-driven angle, leading with the hit to Zuckerberg’s personal fortune and his slide in global wealth rankings, before laying out the earnings miss, the raised spending forecast, and the specific analyst price-target reductions. Both outlets agree on the core facts: the stock’s roughly 9% single-day drop, the 11-day losing streak, the earnings shortfall against estimates, and the spending forecast increase to $137.5 billion without 2027 guidance.
Forbes provides the most detail on comparative context, contrasting Meta’s stumble with Microsoft’s strong reception in the same earnings cycle, using analyst commentary to suggest that investors are rewarding companies that can show measurable AI returns while punishing those whose spending outpaces demonstrated payoff. Forbes also adds historical framing, noting Meta’s stock is down almost 18% for the year despite a brief rally earlier in July — its best week since 2024 — tied to the rollout of an AI image-generation tool called Muse Image, which drew criticism from Hollywood unions, talent agencies and cybersecurity experts over privacy concerns.
Why It Matters
The episode highlights a broader recalibration in how investors are treating the biggest spenders in the AI buildout race. Meta has been among the most aggressive companies in committing capital to AI infrastructure, but the market’s punishing reaction shows that spending alone is no longer enough to reassure shareholders; they now want evidence that the investment is translating into revenue or efficiency gains, as Microsoft’s Copilot user growth appeared to demonstrate. The pointed comparisons drawn by multiple analysts — from Scotiabank to Wedbush — suggest a shift in Wall Street’s patience with open-ended AI capital expenditure, particularly for companies like Meta that have not yet articulated a 2027 spending ceiling. For Zuckerberg personally, the drop illustrates how tightly his fortune remains tied to Meta’s stock performance and investor sentiment toward the company’s long-term AI strategy.
Sources
Featured photo: victorgrigas via Wikimedia Commons (CC BY-SA 3.0)