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].

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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]

Core Viewpoint - Meta's stock price dropped over 10% despite strong earnings, driven by market skepticism regarding its aggressive AI investments [1][2] Financial Performance - In Q3, Meta reported adjusted earnings per share of $7.25 and revenue of $51.24 billion, both exceeding Wall Street expectations [2] - Revenue increased by 26% year-over-year, but net profit was only $2.7 billion, significantly below analyst forecasts due to a $15.93 billion tax expense related to the "Big and Beautiful Act" [2][4] Capital Expenditure and Investment Strategy - Meta raised its 2025 capital expenditure guidance to $70-72 billion from a previous estimate of $66-72 billion to enhance AI capabilities [1] - CEO Mark Zuckerberg defended the company's substantial spending plans, stating that early returns in core business justify increased investment [1][3] Market Reactions and Analyst Concerns - Analysts expressed caution regarding the potential for excessive spending, highlighting a growing tension between large AI infrastructure investments and investor expectations for short-term returns [3] - The stock price drop reflects a shift in investor sentiment towards ongoing high expenditures [3] AI Initiatives and Collaborations - Earlier this year, Meta invested $14.3 billion in AI startup Scale AI and initiated new cloud partnerships to build AI infrastructure [2] - Meta's AI hardware division, Reality Labs, reported an operating loss of $4.4 billion in Q3, with revenue of $470 million, indicating challenges in profitability [4] Debt Issuance Plans - Meta plans to issue at least $25 billion in investment-grade bonds, which would be one of the largest transactions of 2025 [3]

Analysts said investors were likely perturbed by how much Meta Platforms Inc is targeting at least $25 billion in its bond sale, Bloomberg News reported on Thursday, a day after the company forecast "notably larger" capital expenses next year due to investments in artificial intelligence and data centers.According to fixed-income news service IFR, the Facebook and Citigroup and Morgan Stanley are leading the offering, IFR reported. Shares of Meta were down about 10.5 per cent during premarket hours on news ...

Core Viewpoint - Meta's stock price plummeted over 10% despite strong earnings, driven by market skepticism regarding the returns on its aggressive AI investments [2][5][7]. Financial Performance - In Q3, Meta reported adjusted earnings per share of $7.25 and revenue of $51.24 billion, both exceeding Wall Street expectations. Revenue grew by 26% year-over-year, but net profit was only $2.7 billion, significantly below analyst forecasts due to a $15.93 billion tax expense related to the "Big and Beautiful Act" [6][10]. - Reality Labs, Meta's AI hardware division, recorded an operating loss of $4.4 billion with revenue of $470 million in Q3, and is expected to see a year-over-year decline in Q4 revenue due to early stocking by retail partners [10]. Capital Expenditure Plans - Meta raised its capital expenditure guidance for 2025 to $70-72 billion from a previous estimate of $66-72 billion, as it aims to develop advanced AI tools to compete with rivals [5][6]. - CEO Mark Zuckerberg defended the company's substantial spending plans, asserting that early investments are yielding returns in core business areas and positioning Meta for future opportunities [5][6]. Market Reactions and Analyst Sentiment - Analysts expressed concerns about the potential for excessive spending, highlighting a growing tension between Meta's large-scale AI infrastructure investments and investor expectations for short-term returns [7][8]. - The market's reaction indicates a shift in sentiment, with investors becoming wary of the implications of continued high expenditures despite solid fundamentals [8][10]. Debt Issuance - Meta plans to issue at least $25 billion in investment-grade bonds, which would make it one of the largest transactions of 2025 [9].

Core Insights - Meta Platforms' stock fell by as much as 12.1% following a strong Q3 revenue report, due to forecasts of significant spending increases and a large one-time tax charge in 2026 [1][2][6] Financial Performance - Q3 revenue reached $51.2 billion, a 26% year-over-year increase and 8% higher than Q2's $47.5 billion, driven by a 14% rise in ad impressions and a 10% increase in ad pricing [4] - Expenses grew by approximately 32% year-over-year to $30.7 billion, while capital expenditures more than doubled from $9.2 billion in the previous year to $19.4 billion [4] Earnings Impact - A noncash tax charge affected earnings per share (EPS), reducing it to $1.05; however, without this charge, EPS would have been $7.25, exceeding the consensus forecast of $6.71 [5] Future Spending Concerns - The primary concern for investors is the management's outlook for 2026, indicating that total expenses will grow at a "significantly faster" rate than in 2025, driven by infrastructure, cloud spending, and AI-related depreciation [6] - Capital expenditure growth in 2026 is expected to be "notably larger" than in 2025 [6] Market Reaction - The combination of management's spending outlook and the sharp rise in shares year-to-date prompted profit-taking among investors [2][7]