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Key takeaways
- Meta shares fell in extended trading Wednesday after the tech giant reported earnings that beat analysts’ estimates, citing a one-time tax charge related to President Trump’s signing of a “big, beautiful bill.”
- Meta also raised its expected minimum capex, as it works to build out its AI capability.
A nearly $16 billion tax fee tied to President Trump’s signing of the “big, beautiful bill” dented Meta’s third-quarter earnings, sending its shares tumbling.
Shares of Meta Platforms (META) fell 9% in extended trading on Wednesday after the tech giant reported earnings that beat analyst estimates by a large margin, citing tax changes.
The owner of Facebook, Instagram and WhatsApp reported earnings per share of $1.05 for the third quarter, down 85% from a year ago and well below the $6.70 that analysts had expected. The company said it took one hit of $15.93 billion related to the tax changes after implementing the “big, beautiful bill” signed by President Trump in July.
Excluding fees, Meta would have reported earnings per share of $7.25, ahead of analyst estimates. Meta revenue jumped 26% year-over-year to a record $51.24 billion, beating analyst expectations compiled by Visible Alpha.
Meta also raised its minimum expected capital expenditures to a range of $70 billion to $72 billion, from $66 billion to $72 billion previously. This is the third time this year that the company has raised its capital guidance as it builds its AI capability.
Why is this important?
Meta’s repeated moves to boost spending have alarmed investors and increased pressure on it to show that its AI spending is paying off. Wednesday’s big earnings miss and subsequent stock decline may indicate investors are unhappy with the results, although the company noted a one-time tax charge for the hit.
Looking ahead, Meta said it expects fourth-quarter revenue to range from $56 billion to $59 billion, ahead of analyst consensus, and told investors it expects a “significant decline” in U.S. federal cash tax payments for the remainder of 2025 and beyond.
Meta shares are up about 28% for 2025 through Wednesday’s close.
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