So, let's get more on Alphabet and Meta's Q3 results. Bring in Eric Sheridan. He's Goldman Sachs's co-head of tech media, telecom research, has a buy rating on both companies.Eric, let's start with Meta because uh the stock is getting hit pretty hard today on those capex numbers. You know, are you surprised and what do you make of it all. >> I'm not surprised by the initial reaction.I think this market right now is putting a premium on visibility into return uh on capital spend. So similar to the point you ...

Core Insights - Meta's stock is experiencing a decline due to concerns over capital expenditure (capex) visibility and return on investment [1][3] - Alphabet's cloud backlog provides investors with confidence in correlating capex to revenue over the next one to two years [2] - Meta's AI investments are expected to take time to yield results, with a potential wait until the first half of the year for foundational model outputs [3] Meta Analysis - Meta's core business is expected to maintain a revenue growth rate of over 20%, driven by ad creation and monetization efforts [5] - The transformation of Meta AI into consumer and business-facing applications is seen as a critical medium-term goal [5] - Historical patterns indicate that Meta shares often react negatively to investment cycle discussions but tend to revert to market multiples over time [7] Alphabet Analysis - YouTube's advertising revenue has increased by 15% year-over-year, indicating strong performance amidst changing media ad spend [8] - The subscription revenue from YouTube is reportedly growing faster than its advertising revenue, suggesting a robust business model [10] - The combined revenue from YouTube ads and subscriptions is believed to be larger than Netflix and growing at a faster rate, highlighting Alphabet's competitive position [10]

[Music] We're back on Morning Trade Live. Let's focus on Meta Platforms. Now, the stock is selling off today despite Meta pulling in record revenue in the third quarter.Mark Zuckerberg saying on the earnings call that the company expects to invest quote aggressively for computing needs over the next year. Openheimr and Benchmark have both downgraded the stock though after the call. More on that momentarily, but let's just take a look at the board and take a look at some of these big players in the tech spac ...

Big Tech's back on a spending binge — only this time, it's not about COVID-19 pandemic-fueled growth or cloud land grabs. Meta Platforms Inc (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) Google are spending like it's 2021 again, with data centers, GPUs and AI infrastructure replacing metaverse dreams and remote-work hardware as the new capital obsession.Track META stock here.According to JPMorgan's Samik Chatterjee, the trio's combined capex jumped 23% quarter-o ...

The DividendRank formula at Dividend Channel ranks a coverage universe of thousands of dividend stocks, according to a proprietary formula designed to identify those stocks that combine two important characteristics — strong fundamentals and a valuation that looks inexpensive. Meta Platforms presently has an above average rank, in the top 50% of the coverage universe, which suggests it is among the top most "interesting" ideas that merit further research by investors. 10 Oversold Dividend Stocks »But making ...

This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Meta’s employee compensation costs grew at an accelerated pace in the third quarter, driven by “technical” hires, particularly artificial intelligence talent, CFO Susan Li said Wednesday. The tech behemoth ended Q3 with over 78,400 employees, up 8% year-over-year, driven by factors such as “hiring in priority areas of monetization,” Li said during an earnings ...

Core Viewpoint - Meta's stock plummeted nearly 12% following its unexpected capital expenditures, raising concerns about potential AI investment bubbles in the tech industry [3][4]. Group 1: Financial Performance and Market Reaction - Major tech companies, including Alphabet, Meta, and Microsoft, reported a combined capital expenditure of approximately $78 billion in Q3, an increase of 89% year-over-year [3]. - Meta's significant capital spending led to a sharp decline in its stock price, while Alphabet's stock rose over 5% as investors reacted more favorably to its spending increase [3][4]. - Despite a strong performance earlier in the year, Meta's single-day drop shocked the market, highlighting investor sensitivity to spending levels [4]. Group 2: Management Insights and Future Outlook - Meta's CEO Mark Zuckerberg addressed concerns about over-investment in infrastructure, stating that the company has contingency plans, including reallocating excess computing power to core business operations or selling it to other companies [4]. - The Reality Labs division of Meta, responsible for developing AI smart glasses and other wearable devices, reported a loss of $4.4 billion in Q3, with revenues of only $470 million [4]. - Microsoft’s CFO Amy Hood emphasized that despite significant investments in AI, the company still cannot meet the growing market demand across multiple sectors [5].

Cloudflare (+2.2%) beats and raises; adjusted EPS of $0.27 on $562 million (vs. $0.23 and $544.8 million)Twilio (+6%) rises after double beat; adj EPS of $1.25 on $1.3 billion (vs. $1.07 on $1.25 billion)Republic Services (-1.2%) beats on profit; $1.90 adjusted EPS on $4.212 billion in revenue (vs. $1.78 and $4.254 billion)First Solar (+1.89%) beats on revenue thanks to strong module sales; $1.594 billion (vs. $1.554 billion)Rocket Companies (+2%) beats on both; $0.07 EPS on $1.783 billion (vs. $0.04 EPS an ...

Core Viewpoint - The article discusses the recent volatility in the stock market, particularly focusing on the significant drop in Meta's stock price following its earnings report, raising concerns about excessive capital expenditures in the AI sector and the potential for a bubble [2][5][10]. Financial Performance of Tech Giants - Major tech companies, including Alphabet, Meta, and Microsoft, reported a combined capital expenditure of approximately $78 billion in Q3, representing an 89% increase year-over-year. This spending is primarily directed towards data center construction and equipping them with GPUs and other devices [5][10]. - Meta's stock plummeted nearly 12% after its earnings report, attributed to unexpected high capital expenditures and warnings of significantly higher spending in 2026 compared to 2025 [5][9]. - In contrast, Alphabet's stock rose over 5% as investors reacted more favorably to its increased capital spending [5]. Market Sentiment and Concerns - Investors are increasingly questioning whether the substantial investments in AI by these companies are justified or if they indicate a bubble forming in the sector [2][5][10]. - Microsoft reported a record capital expenditure of $34.9 billion in Q3, which surprised investors and led to concerns about the return on investment in AI [10]. Federal Reserve's Monetary Policy - The Federal Reserve's potential interest rate cut in December is uncertain, with differing opinions among committee members. The likelihood of a rate cut has decreased from 90% to 67% according to CME data [4].

Core Insights - The earnings reports from Microsoft, Alphabet, and Meta reinforce the bullish investment thesis in AI, with significant capital expenditures expected to drive future growth [2][10][18] - Chipotle's recent earnings report was disappointing, highlighting challenges with younger consumers who are reducing spending, leading to a significant drop in its stock price [7][41][46] Company Earnings Analysis - Microsoft, Google, and Meta collectively spent $78 billion on capital expenditures in Q3, marking an 89% increase year-over-year, indicating a strong commitment to AI investments [10][12][18] - Alphabet's earnings report was particularly strong, exceeding expectations across various metrics, including cloud revenue and daily active users [18][22] - Meta's stock fell nearly 12% following its earnings report, as the company emphasized prioritizing AI infrastructure over short-term returns, which raised concerns among investors [6][28][30] Market Reactions - The overall market showed a negative trend, with major indices declining as investors reacted to the earnings reports and comments from the Federal Reserve regarding interest rates [3][4] - Chipotle's stock dropped over 19% after the company reported that younger consumers are pulling back on spending, which is a significant portion of its customer base [7][46] - Analysts expressed mixed feelings about Microsoft’s performance, suggesting it may present a buying opportunity despite some concerns about Azure growth [20][22] Economic Context - The unemployment rate for young people has risen to 9.2%, up from 7.9% a year ago, contributing to reduced spending among this demographic [46] - Inflation and rising costs are impacting consumer behavior, with companies like Chipotle unable to raise prices significantly without losing customers [54][55] Future Outlook - OpenAI is preparing for an IPO that could value the company at $1 trillion, but concerns about profitability and capital needs remain [56][60] - Microsoft is viewed as a safer investment compared to OpenAI, given its established market position and ongoing growth in cloud services [68]