Meta and Microsoft Disappoint Investors

Danger, danger! That’s the message Wall Street sent Meta Platforms tonight, as investors sold off shares in the company in the wake of its predictably healthy third-quarter earnings result. They perhaps weren’t thrilled that Meta plans to lift capital expenditures significantly again next year, on top of a projected increase this year of as much as 43%.

Meta’s habit of spending tens of billions on unproven new technologies has been a periodic irritant for investors, most recently in 2022 when the spotlight was on Reality Labs spending. But the big concern that year was that Meta’s revenue fell for a couple of quarters, not the investment plan. Nowadays, investors seem to have made peace with CEO Mark Zuckerberg’s lavish investment spending—as long as the company delivers strong revenue and earnings growth, which it has done.