Meta Misses Profit Forecast, Shares Fall 5% in After-Hours Trading
Revenue met expectations, but earnings of $6.18 per share fell well short of forecasts. Shares are down approximately 5% in after-hours trading.
Meta (META), the parent company of Facebook, Instagram, and WhatsApp, released its financial results for the second quarter of 2026 on Wednesday night.
The company reported revenue of $60.8 billion, meeting analyst forecasts of approximately $60.23 billion. However, earnings per share amounted to $6.18, significantly lower than the projected $7.19.
Following the report, Meta's stock fell by about 5% in after-hours trading. Shares have declined by approximately 10% year-to-date and 16% over the last 12 months, despite relatively strong business performance. The decline largely reflects concerns that massive expenditures on artificial intelligence (AI) will weigh on profitability and cash flow before these investments generate significant new revenue streams.
Will Meta turn AI infrastructure into a standalone business?
A central topic for investor discussion is whether Meta intends to rent out excess computing capacity in its data centers to external clients. Mark Zuckerberg recently stated that it makes sense to explore renting out these resources, a move that would allow the company to monetize infrastructure previously used solely for internal needs. Meta could potentially operate under a model similar to dedicated cloud providers that lease access to chips and servers for AI application development.
This strategy gained momentum this week as Meta and BlackRock announced an agreement to build a one-gigawatt data center in Texas. The project involves an investment of approximately $14 billion, with BlackRock holding an 80% stake and Meta holding 20%. This financial structure enables Meta to expand its computing infrastructure without bearing the full cost of construction and may serve as a blueprint for future deals.
Simultaneously, Meta is expanding its presence in the AI model market. This month, the company launched the Musk Spark 1.1 model with pricing significantly lower than that of its competitors. Meta charges $1.25 per million input tokens and $4.25 per million output tokens, compared to $5 and $25, respectively, for Anthropic's Opus 5 model. While this strategy helps attract developers, it also raises questions regarding the profitability the company will be able to derive from these services.
