Meta, Microsoft shares drop as AI spending soars
Meta and Microsoft shares dropped Thursday after both companies revealed they're pouring even more money into AI.
While Meta's earnings looked solid, investors got nervous about the rising costs, contributing to a broader decline in the Nasdaq.
Meta's stock tumbles over 11%
Big tech is betting huge on AI, but all that spending has some people worried about profits in the short term.
Meta's stock tumbled over 11% after it said next year's expenses could hit $72 billion.
Microsoft also took a hit—down 3.4%—as its net income fell by $3.1 billion thanks to investments in OpenAI.
Both companies are racing to lead in AI
Both companies are racing to lead in AI, ramping up infrastructure and research spending—even if it means less profit for now.
Meta just lined up $125 billion in orders for a new bond sale to help fund these projects, showing there's still big interest despite market jitters.
The hope: today's massive investments will pay off big down the line.