Meta's heavy AI spending squeezes free cash flow

Meta Platforms significantly raised the upper end of its annual capital expenditure guidance. Mark Zuckerberg is pressing ahead with heavy investment in AI model development and data center construction, calling it the company's top priority for years to come. As a result, free cash flow dropped noticeably, with money flowing into infrastructure faster than the advertising business can replenish it. That said, advertising revenue remains resilient, giving management some room to maneuver. Some investors back the long-term AI bet, while others worry the returns on these massive outlays may come too slowly.