Meta reports second-quarter results after the close today, and the stock has fallen for nine straight days into the print — the longest losing streak in its history. Attention is on the capital expenditure plan for the rest of the year and 2027, after Alphabet warned last week that it intends to spend more than expected. Deutsche Bank has raised its own Meta capex estimate to about $210-$215 billion in 2027.
Nine straight declines — the longest losing streak in Meta's history — have left the shares below all their key technical moving averages. Investors are selling ahead of today's report rather than waiting for it.
Capex is the key debate into the print
When Meta reports its second-quarter numbers, attention will be on its capital expenditure plan for the rest of the year and 2027. That part of the cash flow statement draws the most attention partly because Alphabet spooked its investor base last week by warning it intends to spend more than expected.
Deutsche Bank analyst Benjamin Black wrote in a note ahead of the report: "Capex remains a key debate" on the stock. So far, signs that generative AI is leading to additional monetization on Instagram and Facebook have been muted.
Deutsche Bank lifts its 2027 and 2028 capex estimates
Before Alphabet raised its FY26 capex guide, Black wrote, there were limited expectations for Meta to increase its current 2026 guidance of $125-$145 billion. Now, he wrote, it is likely investors fear an increase in the FY26 outlook may be coming. Buy-side expectations for 2027 capex have been raised to the low-to-mid $200 billion range, and Black raised his own estimate to about $210-$215 billion in 2027 and about $265 billion in 2028.
Meta shares down 15% in a month as AI euphoria fades
Meta shares are down 15% over the last month. Sharp falls in the value of chip makers have stoked investor concerns that the euphoria around AI-related companies is fading. Its stock price has gone nowhere for more than a year, a lagging performance that coincides with increases in annual capital expenditures.
Lingering concerns are that the big AI companies — Meta, Alphabet, Open AI and Anthropic — will find it hard to charge end users enough to justify the hundreds of billions being spent on buying chips and building data centres. Black also argued that a third-party cloud business would add a direct revenue stream against assets investors currently value largely through indirect benefits to ads and engagement.
Sources: Yahoo Finance, BBC News
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