Usman Salis
⬤ META stock corrected 20% after the company's Q3 2025 earnings release, primarily due to investor anxiety over expected increases in capital spending. The decline reflects the tension between Meta's long-term investments in AI infrastructure and data centers versus the market's demand for careful cost control. Investors are now reassessing how higher capex might impact future profit margins and cash flow.
⬤ Potential tax reforms add another layer of concern. Changes to depreciation rules, R&D deduction limits, and digital service taxation could increase costs for Meta and its partners. These policy shifts might force smaller contractors into financial distress and push tech talent toward more tax-friendly regions, further complicating the outlook for META stock.
⬤ Meta's aggressive investment approach aims to secure technological leadership, it creates near-term earnings uncertainty. The stock's performance now hinges on whether the company can successfully balance innovation with financial discipline.
⬤ The coming quarters will determine if Meta's spending strategy delivers long-term value or continues to drive volatility in the stock price.
Usman Salis
