Meta Platforms shares plunged 6% in late trading Tuesday after the company reported second-quarter sales and profit figures that missed market expectations.
The decline marks a sharp reversal for the stock, which had been rallying on optimism surrounding CEO Mark Zuckerberg’s artificial intelligence strategy ahead of the official earnings release later this week.
The disappointing guidance suggests that the massive capital expenditures Meta has directed toward its AI infrastructure have yet to translate into proportional revenue growth.
Investors are increasingly scrutinizing the efficiency of these investments, particularly as the company faces pressure to demonstrate tangible returns from its generative AI initiatives.
The sell-off reflects growing skepticism that the current ad model can sustain the high growth rates previously anticipated.
This development adds to a week of volatility for the tech giant.