Oncast Money · Money Tonight

Meta's record revenue, brutal selloff

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Meta reported record Q3 revenue of $64.6 billion (up 26% year over year), beating the $63.37 billion consensus, but shares fell more than 7% on Thursday. Free cash flow was negative $2.12 billion — the company's first cash burn in more than a decade. GAAP EPS came in at $3.83, dragged down by a $9.9 billion legal charge tied to its teen mental health settlement; excluding that charge, EPS would have been about $7.40. Meta raised the lower end of its 2026 capex guidance to $135 billion (from $130 billion), with the top end at $145 billion, and said it will issue a new non-voting Class C share class — effectively a 2-for-1 split — to help fund AI spending, with trading expected in late January 2027.

Investors are increasingly worried about the cost of the AI race. Meta's spending plans pushed the company into negative free cash flow and prompted it to plan new equity issuance, which spooked markets. The cost of insuring Meta's debt against default (five-year credit default swaps) hit a record 114.79 basis points, signaling that AI-spending fears are spreading from equities into credit markets. The selloff came despite strong revenue and a bullish Q4 revenue guide of $73B–$76B.

Meta beat Q3 revenue expectations ($64.6B vs $63.37B expected) but shares fell more than 7% as free cash flow turned negative for the first time in years, capex guidance rose to $135B–$145B, a $9.9B teen-mental-health legal charge cut GAAP EPS to $3.83, and the company announced an effective 2-for-1 split via new non-voting Class C shares.

Fact-check

VERIFIED TRUE

Meta beat Q3 revenue expectations ($64.6B vs $63.37B expected) but shares fell more than 7% as free cash flow turned negative for the first time in years, capex guidance rose to $135B–$145B, a $9.9B teen-mental-health legal charge cut GAAP EPS to $3.83, and the company announced an effective 2-for-1 split via new non-voting Class C shares.

US Stock News 24-Hour Important Summary 1. Meta dropped hard after earnings. Revenue beat expectations but the stock tanked on massive AI spending, negative free cash flow for the first time in years, a big legal settlement that crushed EPS, and a 2-for-1 split that creates https

Original post · FALENO Nguyen (@falenostar)

cnbc.com, investing.com, finance.yahoo.com NAMES: META = Meta Platforms (Facebook/Instagram parent); Class C shares = new non-voting stock class Meta is issuing

Sources

What the hosts said

BAI stocks got crushed today, and the Nasdaq had its worst day since June.
AKalshi Finance posted that the Philly semiconductor index tanked six point seven percent. I couldn't confirm that exact number.
BBut the direction's right. Chip stocks led the selloff.
ASo the whole AI complex is trading as one bet, and that's how concentrated this market has become.
BWhich is the real story. The fragility of the AI trade.
ASpeaking of AI bets, a Bitcoin research head is out with a wild number.
BOne percent of global capital into Bitcoin gets you a price around two hundred seventy-five thousand.
AThat's the lower end, apparently.
BIt's a thought experiment, not a forecast. But it tells you how the Bitcoin bulls are thinking.
AOne percent of global capital is trillions. That's not a small ask.
BNo, but that's the pitch. Bitcoin as a tiny slice of every portfolio.
AAnd the price math only works if the flows arrive. The question is whether they ever do.
BThe ETF plumbing's there. The allocation is the missing piece.
AMeanwhile, Conor Sen on Bluesky says the Fed is probably still hiking in December.
BHiking? With the market pricing cuts?
AThat's the contrarian take. Most people think the Fed's done or close to it.
BSen's argument is that the economy's too strong. Jobs, spending, all of it.
AA hike in December would be a shock. The market's not positioned for that.
BWhich is exactly why it could happen. The Fed loves surprising a complacent market.
AI think he's wrong. But it's a useful reminder that the Fed's not on autopilot.
BAnd if he's right, every AI stock that just got hit has another problem coming.
AHigher rates and heavy spending. That's a brutal combination for the AI trade.
BMy take? The spending's not going away. But the stocks without a clear path to profit will keep bleeding.
AFair. The tape says fear. The fundamentals say growth. Pick your poison.
BAnd the Fed sits in the middle of that, with the next move up for debate.

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