Meta Platforms Shares Drop 11% in June Amid AI Spending Concerns

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Meta Platforms shares fell 11% in June as investors questioned the company's AI strategy and heavy capital spending. The decline accelerated on June 5 when the Financial Times reported Meta was considering raising tens of billions of dollars through a stock offering to fund its AI ambitions, sending the stock down 6% in a single day. Unlike other hyperscalers such as Amazon, Microsoft, and Alphabet, Meta lacks a cloud computing business, making its planned $125 billion to $145 billion in capital expenditures this year appear especially risky. The company is burning roughly $20 billion annually on its Reality Labs division, which houses AI projects, with no clear return yet. Additional pressure came from low employee morale following layoffs and an AI reorganization that CTO Andrew Bosworth described as 'atrocious,' as well as the U.K. banning social media for children under 16.