Meta Crushes Revenue Estimates as AI Spending Hits Profit Margins

Meta Platforms just delivered a massive second quarter revenue beat, pulling in $60.8 billion and easily topping Wall Street forecasts. The social media giant grew revenue by 28 percent year over year, thanks to smart artificial intelligence tools that improved ad targeting and boosted user engagement. Daily active people across the platform family reached 3.60 billion.

Despite the strong top line growth, profitability took a significant hit. Diluted earnings per share dropped to $6.18, and operating margins narrowed to 31 percent. Total expenses surged to $42.03 billion, driven by billions spent on legal charges, severance, and heavy investments in data centers and artificial intelligence infrastructure. Free cash flow dropped sharply to just $784 million after capital expenditures topped $31 billion.

Looking ahead, Meta raised its capital expenditure guidance for 2026 to a range between $130 billion and $145 billion. Management remains confident that heavy spending will pay off by securing a dominant position in enterprise artificial intelligence and ad technology. Traders will watch closely to see if record spending successfully translates into higher long term earnings.