Meta’s stock experienced its steepest single-day decline this year, falling about 9% and extending an 11-day losing streak that has wiped out more than 20% of its value over that period. This slump cut nearly $18 billion from Mark Zuckerberg’s net worth, placing him among the world’s top richest individuals but reflecting growing investor skepticism.
Investor concerns intensified after Meta announced it would significantly boost its annual spending to nearly $138 billion without providing long-term revenue guidance through 2027. Although the company’s quarterly revenue exceeded expectations, posting $60.8 billion, earnings per share came in well below estimates, highlighting profitability challenges amid heavy investment in artificial intelligence.
Analysts responded by slashing their price targets for Meta, citing uncertainty about the returns from the company’s aggressive AI expansion. Leading firms including Scotiabank, Wedbush Securities, Goldman Sachs, and others lowered their valuations, urging investors to focus on Meta’s free cash flow resilience rather than speculative AI gains.
The pressure on Meta contrasts with Microsoft’s recent success in AI integration. Microsoft’s shares jumped after its AI-powered assistant, Microsoft 365 Copilot, surpassed 30 million paid users, helping the company beat revenue estimates and suggesting that investment in AI technology is starting to pay off.
Meta’s stock performance this year reveals ongoing challenges following significant court decisions and unease about the company’s AI ambitions. Despite a brief rally earlier this month fueled by the launch of a new AI image generation tool, concerns over privacy and broader market hesitancy persist, casting a shadow over Meta's growth trajectory.