Meta Platforms (META) stock is down almost 10% in the pre-market this morning.

Of everything Meta said this quarter, the real story wasn’t the revenue beat or the one-time tax charge that crushed reported net income. It was this: the company just committed to spending $70-72 billion on capital expenditures in 2025. That’s a 93% increase from 2024’s $37.3 billion. For context, Meta spent $31.4 billion on capex in 2022. The company is nearly doubling its infrastructure investment in a single year.

The Bet: Capex as a Competitive Weapon

Mark Zuckerberg’s message was clear and repeated throughout the call. Meta is building AI infrastructure at an unprecedented scale. The company generated $51.24 billion in Q3 revenue, beating estimates by $1.85 billion. Operating income climbed 18.36% year-over-year to $20.54 billion. The ad business is working. Daily active people hit 3.54 billion, up 8% annually.

But none of that is the point anymore. Meta’s leadership is signaling that the next phase of the company’s growth depends on how much computing power it can build, and how fast. Zuckerberg said the next few years would be “the most exciting period in our history.” He wasn’t talking about ads. He was talking about AI infrastructure.

This isn’t subtle. In 2023, capex represented 15.2% of revenue. By 2024, it was 20.8%. For 2025, Meta will spend roughly 36-38% of revenue on capital projects. That’s the highest ratio in company history.

Why This Matters: The Gamble Becomes Visible

Meta’s balance sheet is fortress-like. Operating cash flow hit $91.3 billion in 2024. The company can absorb this spending without debt. Profit margins remain exceptional at 40% company-wide and 43% operating margin. That’s not changing.

But free cash flow is about to compress dramatically. In 2024, after capex, Meta had roughly $54 billion in free cash flow. In 2025, with $70-72 billion in capex, that number drops to around $20 billion. The company is choosing to reinvest nearly all its cash generation into AI infrastructure.

This is a bet. Meta is saying: we believe AI will drive the next decade of value creation. We’re going to outspend competitors to build the infrastructure first. Zuckerberg’s confidence was unmistakable on the call. But confidence isn’t proof.

The market is skeptical. Meta’s stock has sold off roughly 5% since earnings, despite the revenue beat and strong fundamentals. Analysts maintain a bullish consensus with target prices around $868, suggesting 24.7% upside. Yet the stock weakness signals doubt about whether this capex trajectory will actually generate returns.

What to Watch Next

The real test comes in the next two to four quarters. Meta needs to show that this AI infrastructure is being monetized. Can the company leverage these systems to improve ad targeting, reduce costs, or create new revenue streams? Or is this capex spending a multi-year experiment with an uncertain payoff?

That’s the one thing that defines this quarter. Meta just went all-in on AI infrastructure spending. Everything else is secondary to whether that bet pays off.

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