Meta AI Capex Free Cash Flow

Meta grew revenue 28 percent to 60.8 billion dollars last quarter. Its free cash flow dropped 91 percent to 784 million dollars in the same three months.

Both numbers are true. Only one of them moved the stock.

Shares fell nearly 10 percent after hours, not because the ad business slowed, but because AI infrastructure spending hit 31.1 billion dollars in a single quarter, on pace to put full year capex between 130 and 145 billion dollars, roughly double what Meta spent on AI last year.

This is the tension defining enterprise AI right now. The revenue case for AI investment is increasingly proven. The cash flow case is not, at least not yet. Boards approving AI budgets this year are making the same bet Meta just made public: that near term margin compression is the cost of not being left behind, and that the payoff shows up on a timeline investors are losing patience with.

The companies that win this cycle will not be the ones spending the most. They will be the ones who can show the clearest line from AI capex to AI revenue, fastest.

Is the market right to punish AI spending today, or is it mispricing the payoff window?