Today’s Stock Price: Stocks Stumble on AI Spending, Tax Hit

12 hours agoLast Updated: October 31, 2025

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Today’s Stock Price: Stocks Stumble on AI Spending, Tax Hit

By Sarah Fielding | Published: 2025-10-30 12:58:00 | Source: Fast Company – news

Shares of Meta Platforms (Nasdaq: META) fell about 9% in pre-market trading on Thursday. This follows what can only be described as a mixed bag from the third quarter earnings report on Wednesday, October 30.

On the one hand, Meta reported revenue of $51.2 billion, up 26% year over year (YOY) from $40.6 billion and a quarterly record for the company. The increase also exceeded Wall Street estimates of $49.6 billion, according to consensus estimates He cited it Bloomberg.

However, Meta also reported a non-cash income tax charge of $15.93 billion. This one-time charge resulted in a significant 83% decline in Meta’s net income year over year. It also means that the company’s earnings per share fall to $1.05 from $6.03 in 2024.

While the parent company of Facebook, Instagram, WhatsApp and Threads indicated that earnings per share would have been $7.25 without the tax charge, they actually came in well below Wall Street’s forecast of $6.70, according to consensus estimates. He cited it the Guardian.

“Our computing needs have continued to expand.”

Meta also increased its total estimated expenditures for 2025, from between $114 billion and $118 billion to $116 billion and $118 billion. Likewise, its capital expenditure estimates for this year rose from $70 billion to $72 billion, from a range of $66 billion to $72 billion.

Why the higher numbers? It all comes down to artificial intelligence

On an earnings call, CEO Mark Zuckerberg said that despite building a “strong assumption” of the value of AI infrastructure, demand continues to increase in a way that “is very likely to be something profitable.”

He claimed that there are over a billion people actively using Meta AI on a monthly basis

“As we began planning for next year, it became clear that our computing needs continued to expand significantly, including versus our expectations in the fourth quarter,” Zuckerberg said. “We are still working on our capacity plans for next year, but we expect to invest aggressively to meet these needs, whether by building out our own infrastructure or contracting with third-party cloud providers.”

Zuckerberg admits there may be unnecessary overreach, but claims it can be turned into “better intelligence and recommendations” for a host of meta apps and ads.

He also noted that capital expenditures and total expenses will be “significantly” higher in 2026 than in 2025, due to infrastructure costs and employee compensation.

It is worth noting that Meta laid off 600 people from its artificial intelligence research laboratory just last week.

“By reducing the size of our team, fewer decision-making conversations will be needed, each person will be more resilient and have greater scope and impact,” Alexander Wang, chief AI officer at Meta, said in a note about the layoffs.

Zuckerberg did not announce the new “super-intelligence” laboratory until June

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(tags for translation)Mark Zuckerberg

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