TLDR
- Meta Platforms (META) stock closed Thursday at $648.85, down 7%, a day after record Q3 revenue.
- Revenue hit $64.6 billion, up 26%, with Q4 guidance of $73 billion to $76 billion.
- Free cash flow turned negative at $2.12 billion, a first as a public company.
- Spending commitments rose to $825 billion, and the 2026 capex range is now $135 billion to $145 billion.
- Meta plans a Class C stock dividend that works like a 2-for-1 split.
Meta Platforms (META) stock ended Thursday at $648.85, down $48.67 or 7%. The drop followed a record third-quarter report released Wednesday.
The stock had climbed as high as $737.70 in after-hours trading. By Thursday’s low of $648.26, that gain had become a 12% swing in under 18 hours.
Revenue came in at $64.6 billion, up 26% and above the $63.3 billion Wall Street expected. Advertising brought in $63.06 billion of that total.
Meta guided fourth-quarter revenue to $73 billion to $76 billion. Daily active people hit a record 3.64 billion, just short of the 3.65 billion forecast.
GAAP earnings per share were $3.83, ahead of the $3.56 estimate. A $9.89 billion legal charge tied to the teen mental health settlement held that number down, and EPS would have been $7.40 without it.
Why Investors Sold
The main concern was cash. Free cash flow was negative $2.12 billion, the first negative quarter since Meta went public.
Capital spending of $34.91 billion topped operating cash flow of $32.79 billion. Meta also lifted the low end of its 2026 capex range to $135 billion to $145 billion.
Spending commitments climbed to $825 billion from $700 billion in July. That total includes data center leases and cloud contracts.
The selling hit the whole AI group. The Nasdaq Composite fell about 2%, and Alphabet and Microsoft both dropped.
Meta’s five-year credit default swap rose to 119.3 basis points, a record. Swaps on Oracle, Microsoft and Broadcom widened too.
Analysts stayed mostly positive on the outlook. They pointed to Muse, the AI agent that reached 10 million users in the U.S. and Canada within six weeks.
CEO Mark Zuckerberg said Muse “will be highly profitable over multiple years” if compute efficiency improves. Investors chose to look at the bill first.
Class C Stock and Legal Costs
Meta will give each Class A holder a non-voting Class C stock dividend, which works like a 2-for-1 split. It takes effect January 19.
The move is meant to keep Zuckerberg in control if California’s Proposition 40 passes. That measure calls for a 5% tax on taxpayers with assets above $1 billion.
CFO Susan Li said there were no specific financing plans to share. Before the report, a New Mexico judge ordered Meta to pay $25 billion in a consumer-harms case.
Thursday’s low sat just under the 2026 opening price of $648.74. In Friday premarket trading, the stock was at $648.61, down 24 cents.
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