Meta Platforms (NASDAQ:META | META Price Prediction) shares tumbled in after-hours trading on Wednesday, July 29, after the social media giant delivered a rare profit miss, with the stock falling as much as roughly 10% at the low. Shares closed the after hours session with a 7.45% decline at $542.00. Applied to CEO Mark Zuckerberg’s roughly 13.1% to 13.6% ownership, the market-value drop translates to an estimated $15 billion paper loss on his stake.
A Revenue Beat, a Profit Miss
Meta reported Q2 revenue of $60.8 billion, up 27.96% year over year, edging past consensus of roughly $60.29 billion. Diluted EPS of $6.18 missed the $7.22 consensus by 14.42%, snapping a six-quarter streak of EPS beats.
Net income slid to $15.848 billion, down 13.57%, while operating income fell 8.15% and operating margin compressed to 31% from 43%. Total costs and expenses spiked 55% to $42.03 billion, including $2.40 billion in legal charges and $1.18 billion in severance tied to an 8,000-employee headcount reduction in May 2026. Free cash flow collapsed to $784 million, down 91.31% from $8.55 billion a year earlier.
The AI Capex Question
The core business remained strong. Advertising revenue climbed 27% to $59.36 billion, Family of Apps daily active people reached 3.60 billion, up 3%, and average price per ad rose 12%. What rattled investors was the price tag on Meta’s AI buildout. Full-year capex guidance was narrowed to $130 billion to $145 billion, with the majority earmarked for AI infrastructure, and total expense guidance was raised to $165 billion to $169 billion. Long-term debt was raised to $83.66 billion to fund the buildout. Q3 revenue guidance of $61 billion to $64 billion was widely characterized as lackluster.
Zuckerberg Defends the Bet
Meta entered the report already under pressure, with shares down 11.13% year to date and 16.07% over the past year. The 52-week range stands at $520.26 to $796.25.
In the release, Zuckerberg said, “AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities. The results are already showing, and I’m optimistic about the potential ahead.” He has separately told The New York Times that AI discourse is “overwhelmingly filled with doom.” Bloomberg characterized the earnings call as Zuckerberg “defending AI bets to skeptical investors.”
Reddit sentiment on r/stocks slid to 33 (bearish) immediately after the release, while r/investing held at 69 (bullish lean), capturing the split between traders reacting to the miss and longer-term holders eyeing the entry point. The Q2 report fits a broader earnings-season pattern in which AI infrastructure spending is unsettling investors even at companies posting robust top-line growth.
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