Meta reported a negative free cash flow of $2.12 billion for the third quarter, which contributed to a 6% decline in its stock price. The company also raised its full-year capital expenditures forecast to between $135 billion and $145 billion, up from a previous minimum of $130 billion.
This increase in spending is primarily directed towards artificial intelligence initiatives, which has led to heightened credit concerns among investors, as evidenced by the all-time high spreads on its five-year credit default swaps. Despite these financial challenges, Meta's revenue grew by 26% year-over-year, reaching $64.60 billion, surpassing analyst expectations of $63.37 billion.
However, the earnings per share of $3.83 fell short of the anticipated $5.75, raising questions about the company's profitability.
Additionally, CEO Mark Zuckerberg's potential relocation due to California's proposed wealth tax was addressed in an SEC filing, indicating that a new class of nonvoting stock is being created to help maintain the company's leadership structure and facilitate growth financing