Meta reported second-quarter 2026 earnings of $6.18 per share, falling short of analyst expectations near $7.14, while revenue topped forecasts at $60.8 billion versus $60.2 billion expected [1, 2, 3]. The company’s free cash flow plunged 91% year-over-year to $784 million, a steep decline attributed to substantial investments in AI infrastructure and research [4, 5].

Meta raised its full-year 2026 capital expenditure forecast to between $130 billion and $145 billion, up from the prior range of $125 billion to $145 billion, reflecting increased spending on data centers, AI models, smart glasses, and Metaverse projects [1, 6, 7, 2, 3]. CEO Mark Zuckerberg said, "I get that this is a big investment and it’s a big bet. We see the technology working... We believe that this is going to be a big thing" [6]. He also described Meta as "a full-stack technology company" focused on AI and related technologies [3].

Among major investments, Meta formed a partnership with BlackRock to fund a $14 billion AI data center in El Paso, Texas, where BlackRock holds an 80% stake. The 1,000-acre, one gigawatt campus has been under construction for more than six months [6, 7, 8]. Meta is also developing a data center in rural Louisiana costing over $250 billion, partly financed through a partnership with Blue Owl Capital [6, 7, 8].

Meta plans to enter the cloud business by selling AI compute capacity to third parties but faces challenges balancing compute resources for internal AI training versus external sales [1, 4, 5, 3]. Investor skepticism has grown over Meta’s ability to generate profits and positive returns on its large AI spending, especially given the dramatic free cash flow squeeze [6, 7, 2, 3]. The company’s stock fell roughly 8% to 10% after the earnings release, continuing an 11-day losing streak and adding to a cumulative 16% decline in 2026. Mark Zuckerberg’s net worth declined by about $18 billion following the stock drop [1, 6, 7, 5, 2, 3].

For the third quarter, Meta forecast revenue between $61 billion and $64 billion, below some analysts’ expectations near $63.2 billion [6, 7, 5]. Analysts note that Zuckerberg’s optimistic narrative during the investor call contained limited concrete details on how profits will improve from AI investments [5].

Meta’s next key update will come with its third-quarter earnings report, which investors will watch closely for signs of improving cash flow and clearer returns on its AI bets [1, 6, 7].