Topline<\/p>\n
Meta shares dropped by more than 12% as trading opened Thursday, pacing what would be the company\u2019s largest single-day loss in years after a nearly $16 billion tax charge lowered its quarterly earnings well below Wall Street\u2019s forecasts. <\/p>\n
Earnings fell significantly below Wall Street\u2019s expectations, though Meta said it would have exceeded projections before the tax charge.<\/p>\n
Getty ImagesKey Facts<\/p>\n
Shares of Meta fell 12.3% to around $658.50 after the bell rang Thursday morning, the largest intraday loss for the stock since a 24.5% decline in October 2022.<\/p>\n
Meta on Wednesday reported<\/a> third-quarter earnings per share of $1.05, 84% below economists\u2019 projections of $6.72, according to FactSet, despite revenue of $51.2 billion, above estimates of $49.5 billion.<\/p>\n The 83% dip in EPS over the previous year ($6.03) was marked by a one-time tax charge of $15.9 billion because of President Donald Trump\u2019s One Big Beautiful Bill Act, Meta said, noting it expects a \u201csignificant reduction\u201d in its U.S. federal cash tax payments for the rest of 2025 and future years.<\/p>\n Without the tax charge, Meta said earnings per share would have been $7.25.<\/p>\n The company raised its guidance for capital expenditures from between $66 billion and $72 billion to between $70 billion and $72 billion, as CEO Mark Zuckerberg said the company is \u201caggressively\u201d preparing for the arrival of superintelligence, which Zuckerberg said Meta would be \u201cideally positioned for a generational paradigm shift in many large opportunities.\u201d<\/p>\n Meta\u2019s Reality Labs unit, responsible for developing the company\u2019s VR headsets and AI smart glasses with Ray-Ban and Oakley, recorded an operating loss of $4.4 billion after generating $470 million in sales, just ahead of Wall Street’s expectations that the division would lose $5.1 billion on $316 million in revenue.<\/p>\n Microsoft Stumbles After Reporting Earnings\u2014while Alphabet Rises<\/p>\n Microsoft shares decreased 2.2% to around $529.40 after reporting better-than-expected quarterly results on Wednesday. Microsoft posted earnings per share of $4.13 and revenues totaling $77.6 billion, surpassing forecasts of $3.67 and $75.4 billion, according to FactSet. Microsoft also reported a jump in cloud revenue, rising 28% year-over-year to $30.9 billion. A stock decline for Microsoft appeared to be linked to the company reporting a $3.1 billion hit to net income through the quarter because of its investment in OpenAI, which equated to a loss of $0.41 per share. Alphabet, unlike its \u201cMagnificent Seven\u201d partners, rose 2.7% after its earnings report Wednesday. The quarterly report was headlined by Alphabet\u2019s revenues crossing $100 billion for the first time, hitting $102.3 billion while above estimates of $99.9 billion. <\/p>\n What To Watch For<\/p>\n Apple and Amazon will report earnings after market close Thursday. Apple is projected to report earnings per share of $1.78 and $102.2 billion in revenues, while Amazon is expected to post EPS of $1.57 and $177.9 billion in revenues. Nvidia will be the last of the \u201cMagnificent Seven\u201d to post earnings, with a quarterly report scheduled for Nov. 19.<\/p>\n Key Background<\/p>\n Meta, whose shares are up 10% this year despite Thursday\u2019s slide, has spent billions in recent years as more companies shift to meet growing demand for AI. Meta invested $14.3 billion in the AI startup Scale AI earlier this year and hired its CEO, Alexandr Wang, to lead Meta\u2019s AI initiative, Superintelligence Labs. The company has also reached several cloud deals in recent weeks to build its AI infrastructure, including a six-year, $10 billion<\/a> deal inked with Google in August. <\/p>\n Further ReadingForbesApple Passes $4 Trillion Market Value\u2014Joining Microsoft And NvidiaBy Ty Roush<\/a>ForbesTesla Shares Stumble 5% After Third Quarter Profit SinksBy Ty Roush<\/a>ForbesSenate Passes Trump\u2019s Megabill: Here\u2019s What\u2019s In And OutBy Sara Dorn<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Topline Meta shares dropped by more than 12% as trading opened Thursday, pacing what would be the company\u2019s…\n","protected":false},"author":2,"featured_media":261078,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[4613,28,12,1282,37809,140883,1281,4321,23607,19488,3479],"class_list":["post-261077","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-alphabet","tag-business","tag-donald-trump","tag-meta","tag-meta-earnings","tag-meta-shares","tag-microsoft","tag-nvidia","tag-one-big-beautiful-bill","tag-one-big-beautiful-bill-act","tag-trump"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/261077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=261077"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/261077\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/261078"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=261077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=261077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=261077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}