Meta Revenue Surges 26% as AI Spending Hits Cash Flow
Meta’s third-quarter revenue rose 26% year on year to a record $64.6 billion, beating expectations, but its shares fell as investors weighed the cost of AI investment against the returns. Operating income dropped 37% to $12.99 billion, partly due to a $9.89 billion legal charge; excluding it, operating income would have been about $22.88 billion. Capital expenditure and finance lease payments totaled $34.91 billion, leaving free cash flow negative at $2.12 billion, despite operating cash flow of $32.79 billion. Meta raised the lower end of its 2026 capital expenditure forecast by $5 billion, to a range of $135 billion to $145 billion, and forecast fourth-quarter revenue of $73 billion to $76 billion. Advertising remained strong, with impressions up 10%, average prices up 14% and ad revenue up 26%. Meta also proposed distributing non-voting Class C shares to existing shareholders, with the plan expected to take effect in January 2027; the distribution itself would not raise cash or automatically dilute shareholders. Traders will watch whether Meta’s AI spending can generate durable revenue, profits and cash flow, alongside advertising growth and capital expenditure.
Neutral
The reports do not mention a cryptocurrency or provide a direct catalyst for any specific token, so the expected impact on cryptocurrency prices is neutral. In the short term, Meta’s strong advertising growth may support sentiment toward large technology companies, while heavy AI spending, negative free cash flow and falling operating income could increase risk aversion. Any spillover to crypto would likely be indirect and limited, depending on broader moves in technology shares and risk appetite. Over the longer term, evidence that AI investment is producing sustainable earnings and cash flow could support sentiment toward growth and technology-related assets; continued spending without clear returns could have the opposite effect. Traders should not treat Meta’s quarterly results alone as a directional signal for crypto markets.