Meta Platforms shares tumble after earnings, some traders bet on further drop

Shares of Meta Platforms, the parent company of Facebook and Instagram, dropped significantly after the company's latest quarterly earnings failed to meet investor expectations. The sharp reaction reflects growing concerns over rising spending, particularly on artificial intelligence initiatives, amid uncertainty about the near-term payoff from these investments. Some traders have responded by opening bearish options positions, betting the stock has further to fall. Such strategies allow investors to profit from declines with defined risk, making them popular during periods of heightened volatility around big tech earnings. Investors will be watching closely for further commentary from Meta's management on the expected returns from its AI spending.