'Fast Money' traders talk how to play Meta following Q3 results

Core Viewpoint - Meta is significantly increasing its capital expenditures (capex) to enhance its AI capabilities, with a raised capex forecast for 2025 to a range of $70 to $72 billion, up from $66 to $72 billion, indicating a strong focus on infrastructure expansion to seize future opportunities [1][2][16] Capital Expenditures - The company is expected to invest aggressively in both building its own infrastructure and contracting with third-party cloud providers, with a notable increase in capex dollar growth anticipated for the next year [1][2] - Recent significant cloud deals include a $10 billion agreement with Google, a $14 billion deal with CoreWeave, and a $20 billion deal with Oracle, suggesting a trend towards more cloud partnerships [2] Market Dynamics - The tech sector is shifting from being capex-light to capex-heavy, similar to the energy sector, as companies must invest larger amounts to keep pace with AI growth [4][5] - Concerns are rising regarding the return on investment (ROI) from these increased expenditures, as the value proposition may diminish at higher spending levels [5][6] Financial Implications - Meta's recent financial maneuvers include taking on significant debt, such as a $27 billion loan for building a data center in Louisiana, indicating a trend towards financialization in the tech industry [10][12] - The company has faced challenges with its AI initiatives, particularly with its Llama 4 model, which lags behind competitors, raising questions about the effectiveness of its spending [8][9] Performance Metrics - Meta reported a $16 billion charge that impacted earnings per share (EPS), which would have been approximately 10% better than expected without this charge, highlighting the financial strain from increased capex [16] - Despite concerns over spending, the company beat revenue expectations by about 4%, with margins now exceeding 40%, suggesting underlying business strength [16]