Meta falls 7% as $34.9 billion capex outruns cash flow

Meta's quarter is the clearest illustration yet of the bind facing large tech companies: revenue grew 26%, ahead of estimates, but the $34.9 billion spent on capex was more than the cash the business generated, and the shares fell 7% on Oct. 22. The market's reaction was not to a miss on sales but to the cost of pursuing AI at that scale.

The same test now moves to four more companies. Microsoft and Alphabet report Wednesday, followed by Amazon and Intel on Thursday. Bloomberg's hosts said the four make up about 15% of the Nasdaq 100, which has fallen roughly 7% this month, so their results carry weight beyond their own shares.

MetLife's Drew Matus framed the puzzle plainly: firms that cut capex get punished, and firms that raise it get the same treatment, leaving him unsure what investors actually want. He also doubted that headline budgets will turn into spending this year, since firms must find workers, equipment and land first. The Federal Reserve meets Oct. 27 and 28, with its decision due Wednesday afternoon, hours before Microsoft and Alphabet report.