Meta Platforms Inc.Shares drop 20% on AI spending overshadowing revenue beat; EPS miss and guidance raise.
Meta Platforms shares have fallen 20% since July 15th despite second-quarter revenue beating estimates. Sales rose 28% year over year to $60.8 billion, ahead of the $60.3 billion consensus, but earnings per share of $6.18 missed the $7.22 forecast due to legal and severance charges. Guidance has moved three times since spring, most recently to $130 billion to $145 billion for the year, and free cash flow plunged 90% to just $784 million. Investors were also disappointed that management downplayed the potential to lease AI compute to third parties, a move that could have demonstrated a return on its massive infrastructure spending. In contrast, Microsoft and Amazon rallied after reporting strong cloud growth, with Azure up 43% and AWS results lifting Amazon more than 15%.
Meta Platforms Inc.Shares drop 20% on AI spending overshadowing revenue beat; EPS miss and guidance raise.
Amazon.com IncAWS results lifted Amazon more than 15%, indicating strong cloud demand.
Microsoft CorporationAzure up 43% and Microsoft rallied on strong cloud growth.