Meta Shares Tumble 6% as Aggressive AI Spending Drives Free Cash Flow Negative

Meta CEO Mark Zuckerberg showcased the company’s new Ray-Ban smart glasses at the Meta Connect event in Menlo Park, California, on September 17, 2025.

Carlos Barria | Reuters

Meta shares slid approximately 6% on Thursday after the social media giant reported negative free cash flow for the third quarter and lifted the lower bound of its full-year capital expenditure forecast. The company now expects capital spending between $135 billion and $145 billion, up from a previous range of $130 billion to $145 billion.

Free cash flow came in at a negative $2.12 billion for the quarter. The market’s anxiety was reflected in Meta’s five-year credit default swaps, which hit all-time highs, signaling mounting credit concerns as the company doubles down on artificial intelligence infrastructure.

In a securities filing accompanying the earnings release, Meta disclosed plans to create a new class of nonvoting Class C common stock. The move is designed to preserve the company’s “founder-led structure” and “provide Meta the ability to finance its growth.” The filing also revealed that CEO Mark Zuckerberg could relocate from California if the proposed “California Wealth Tax” passes, potentially exposing him to a multi-billion-dollar tax liability based on his holdings. According to the filing, Zuckerberg was persuaded to remain in the state by the new stock structure.

Despite the cash flow pressure, Meta’s top-line growth remained robust. Revenue surged 26% year-over-year to $64.60 billion, exceeding the $63.37 billion consensus estimate. Earnings per share were reported at $3.83, though the company noted this figure may not be directly comparable to the $5.75 per share analysts had projected.

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A 5-day stock chart of Meta.

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