Meta shares fall despite strong Q3 results as AI costs and legal issues weigh

Meta shares fell in pre-market trading Thursday despite the company reporting third-quarter revenue above expectations, as investors weighed the costs of its aggressive artificial intelligence expansion. The stock initially rose after hours Wednesday but declined over 1% by Thursday morning. The company reported revenue of $64.60 billion, up 26% year-over-year and above analyst estimates of about $63.3 billion. Meta also guided fourth-quarter revenue between $73 billion and $76 billion, with a midpoint above Wall Street consensus. However, diluted earnings per share were $3.83 after a $9.89 billion provision related to adolescent mental health litigation. Meta plans to introduce a new class of non-voting shares effective January 19, 2027, distributing one Class C share for each outstanding Class A and B share. The company also faces a $25 billion penalty in a New Mexico data privacy case, while its 2026 capital expenditure forecast was raised to $135-145 billion.