Meta Shares Drop 12% After Trump's Megabill Casts $16 Billion Tax Charge

Core Insights - Meta's shares experienced a significant drop of over 12%, marking the largest single-day loss in years, primarily due to a nearly $16 billion tax charge that adversely affected quarterly earnings, bringing them well below Wall Street's expectations [1][2] Financial Performance - Meta reported third-quarter earnings per share (EPS) of $1.05, which is 84% lower than economists' projections of $6.72, despite revenue of $51.2 billion exceeding estimates of $49.5 billion [2] - The EPS saw an 83% decline compared to the previous year, which was $6.03, largely attributed to a one-time tax charge of $15.9 billion related to tax legislation [2] - Without the tax charge, Meta indicated that EPS would have been $7.25 [3] Future Outlook - The company raised its guidance for capital expenditures from a range of $66 billion to $72 billion to a new range of $70 billion to $72 billion, as CEO Mark Zuckerberg emphasized preparations for superintelligence [3] - Meta's Reality Labs unit, which focuses on VR and AI products, reported an operating loss of $4.4 billion with sales of $470 million, slightly better than Wall Street's expectations of a $5.1 billion loss on $316 million in revenue [3] Strategic Investments - Meta has invested significantly in AI, spending $14.3 billion on the AI startup Scale AI and hiring its CEO to lead its AI initiative, Superintelligence Labs [6][7] - The company has also secured cloud deals to enhance its AI infrastructure, including a notable six-year, $10 billion agreement with Google [7]