Key Highlights

● Meta closed at $648.85 on October 22, its worst day since July.

● The stock had lost about $108 billion in market value by midday.

● Revenue hit a record $64.6 billion, ahead of the $63.3 billion consensus.

● Free cash flow was negative $2.12 billion, Meta's first cash outflow in over a decade.

Meta Platforms (NASDAQ:META) had lost about $108 billion in market value by midday on Thursday, October 22, 2026, as the Facebook and Instagram owner's third-quarter report set off a selloff that rippled across the FT Wilshire 5000 and the wider market. The stock closed at $648.85, its worst day since July.

The reversal was stark. Meta shares had risen in after-hours trading on Wednesday, immediately after the report, before turning sharply lower.

Record revenue, record spending

The quarter itself had plenty of strength. Meta reported record revenue of $64.6 billion, ahead of the roughly $63.3 billion consensus, and guided for fourth-quarter revenue of $73 billion to $76 billion, above expectations. The quarter included a legal charge of about $10 billion tied to a settlement, according to reports.

The worry was spending. Meta narrowed its 2026 capital expenditure range to $135 billion to $145 billion, raising the low end. Third-quarter free cash flow was negative $2.12 billion, which marked the company's first cash outflow in more than a decade. Spending commitments climbed to about $825 billion, up from about $700 billion in July, according to market data.

The cost of insuring Meta's debt against default hit a record, according to market data.

A new share class

Meta also announced a one-time stock dividend of one non-voting Class C share for each Class A and Class B share, according to its filing with the Securities and Exchange Commission. The dividend depends on a charter amendment effective January 19, 2027. Some media described it as a two-for-one stock split, and the filing says the Class A price is expected to reflect a two-for-one split after payment.

Some observers saw the new share class as a way to help fund AI spending, according to reports.

Meta's chief financial officer said, "We don't have any specific financing plans to announce at this time."

The bull case

CEO Mark Zuckerberg struck an upbeat tone. "Our investments are paying off, the core business is strong, and we're seeing velocity across the board," he said in the earnings release.

Several analysts stayed positive. JPMorgan raised its price target to $940 from $920 and kept an Overweight rating. Bank of America lifted its target to $845 from $810 with a Buy rating, and DA Davidson raised its target to $800 from $700. A UBS analyst said, "In our view, Meta is entering a capex harvest cycle."

The ripple effect

Meta's report weighed on the entire AI trade. The Nasdaq Composite fell 694.00 points to 26,008.86, its steepest drop since June 5, and the S&P 500 lost 93.74 points to 7,663.43, its worst day since July.

"They are also getting worried if some of the AI spending is completely out of control with no real return," IBM (NYSE:IBM)'s chief executive said.

Yet about two of every three S&P 500 stocks rose, according to market reports.

Meta Funds Its Commitments and Awaits Its Charter Change

Investors will watch whether Meta's peers echo its spending plans. Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) report on Wednesday, October 28, and Amazon (NASDAQ:AMZN) on October 29.

For Meta itself, attention will focus on how it funds its commitments, the charter amendment tied to the Class C dividend, and early signs of returns on its AI investments.