Meta Platforms' stock plunged more than 12% on Thursday, weighed down by investor skepticism over the company’s aggressive artificial intelligence spending despite strong third-quarter financial results. The social media giant raised its 2025 capital expenditures guidance to between $70 billion and $72 billion, up from its previous range of $66 billion to $72 billion, as it accelerates investments to stay ahead in the rapidly evolving AI race. CEO Mark Zuckerberg defended the elevated spending during the earnings call, emphasizing early signs of returns in Meta’s core business. “It's pretty early, but I think we're seeing the returns in the core business,” he said. “That's giving us a lot of confidence that we should be investing a lot more, and we [want to] make sure that we're not underinvesting.” He added that Meta is “aggressively” building infrastructure now to prepare for what it sees as a generational shift toward superintelligence, positioning the company to capitalize on transformative opportunities. Meta’s AI ambitions are mirrored by its major tech peers. Alphabet recently raised its capital expenditure forecast to $91 billion to $93 billion, while Microsoft signaled continued strong spending growth in its upcoming fiscal year. Meta’s recent moves include a $14.3 billion investment in AI startup Scale AI and the recruitment of Scale’s CEO, Alexandr Wang, to lead its new Superintelligence Labs, alongside former GitHub CEO Nat Friedman. The company has also secured new cloud partnerships to strengthen its AI infrastructure. Despite these strategic bets, the market reacted negatively to the scale of spending, with investors questioning the near-term returns. For the third quarter, Meta reported adjusted earnings of $7.25 per share on $51.24 billion in revenue—both surpassing Wall Street expectations. Revenue rose 26% year-over-year. However, the company reported a one-time $15.93 billion tax charge tied to the implementation of President Donald Trump’s proposed One Big Beautiful Bill Act, which impacted its bottom line. While the financial results were solid, the combination of soaring capital investments and a significant tax charge fueled investor concerns, leading to the sharp drop in Meta’s stock price.