Meta Plunges 12% as AI Bubble Anxiety Grips Wall Street
Tech giant Meta faces brutal selloff as artificial intelligence hype shows cracks in its armor.
THE REALITY CHECK
Investors dumped Meta shares en masse after quarterly projections missed expectations—that 12% nosedive wiping billions from market cap in hours. The usual AI evangelists suddenly remembered that revenue still needs to, well, exist.
PATTERN RECOGNITION
Sound familiar? Tech veterans watching the bloodbath noted uncanny similarities to crypto's boom-bust cycles. Though this time Wall Street analysts get to pretend they 'saw it coming' while quietly trimming their own positions weeks ago.
BUBBLE TROUBLE
When the market's favorite narrative starts crumbling, even the mightiest tech stocks can't escape gravity. Another reminder that in finance, sometimes the most intelligent thing artificial about intelligence is how artificially it's been priced in.
Meta Stock Drop Sparks AI Bubble Talk and Investor Sentiment Shift
The Meta stock drop wasn’t isolated to poor financial results. The company actually beat Wall Street expectations with earnings of $7.25 per share versus the projected $6.69 per share, and revenue ROSE 26% to $51.24 billion. However, the stock plunged in extended trading after CFOannounced the company is raising its spending forecast to between $116 billion and $118 billion, up from $114 billion to $118 billion.
Zuckerberg Defends Aggressive AI Investments
CEO Mark Zuckerberg had this to say about the company’s direction:
“Meta Superintelligence Labs is off to a great start and we continue to lead the industry in AI glasses. If we deliver even a fraction of the opportunity ahead, then the next few years will be the most exciting period in our history.”
Addressing AI bubble concerns directly, Zuckerberg stated:
“Being able to make a significantly larger investment here is very likely to be a profitable thing over some period.”
The CEO explained he is seeing a “” that shows Meta will likely need to invest in even more computing infrastructure than initially anticipated. He also offered a contingency plan, noting that if AI doesn’t grow as expected, the company can repurpose infrastructure for other workloads ““
Analyst Perspectives on Tech Earnings and Investor Sentiment
Despite the Meta stock drop, some analysts remain optimistic. Zacks Investment Research analyststated:
“I expect deep-pocketed institutional investors to defend the stock in the coming days at the $690 to $700 level.”
CFRA Research analysthighlighted the strong advertising performance:
“Advertising momentum grew 26% in the quarter, benefitting from increased ad impressions, up 14%, and higher average pricing of around 10%. Better pricing was key to the beat.”
The AI bubble discussion is ongoing due to the fact that Zuckerberg expenditure is ever-growing. The corporation is signing large contracts with,, andon cloud computing. As much as tech earnings exhibited firm fundamentals, investor sentiments are apprehensive. They aren’t sure whether AI investments are worth the huge prices attached to them. The Meta stock fall is the experimental example of the AI aspirations of the whole industry.
