Back to today’s briefing

Story perspectives

Meta Shares Drop 11% as AI Spend Soars, BlackRock Deal

7/31/2026

50 4 Full Breakdown

Summary

Meta Shares Plummet

Meta Platforms shares fell up to 11% on July 31, 2026 after missing earnings estimates and giving weaker revenue guidance.
Free-cash-flow collapsed to $784 million this quarter from $8.55 billion a year earlier as AI spending surged.
CFO Susan Li said Meta will not slow its spending until 2028, while long-term debt rose to $83.7 billion and capital expenditures used 97.5% of operating cash flow.

Summary

Meta Secures AI

Meta announced a $14 billion data-center partnership with BlackRock in El Paso, Texas, to boost AI compute.
Meta is building the Hyperion data-center in rural Louisiana at a cost above $50 billion.
The Muse Image AI model faced criticism from Hollywood unions, talent agencies and cybersecurity firms over privacy and content-creation.
Meta executives said surplus compute power may be leased at a premium to create a new revenue stream.

History

Historical Context

In 2009 IBM launched the $1 billion Watson AI platform, aiming to turn its Jeopardy! success into commercial products. Early health-care pilots with partners such as Memorial Sloan Kettering (2011) and Cleveland Clinic (2012) failed to generate revenue, leading to a 15% R&D budget cut in 2010 and culminating in the 2022 sale of Watson Health to Francisco Partners.

1 of 3

Meta Shares Plummet

Meta Platforms shares fell up to 11% on July 31, 2026 after missing earnings estimates and giving weaker revenue guidance.
Free-cash-flow collapsed to $784 million this quarter from $8.55 billion a year earlier as AI spending surged.
CFO Susan Li said Meta will not slow its spending until 2028, while long-term debt rose to $83.7 billion and capital expenditures used 97.5% of operating cash flow.

1 / 3