Episode summary
Earnings Special: Meta Boosts Bet on AI With Spending Outlook, New Stock Class | Bloomberg...
Bloomberg Intelligence
· · 14 min · Hosts: Carol Massar, Tim Stenovec, Paul Sweeney · Guests: Ed Ludlow
Summary
Meta reported another quarter of strong ad-driven growth while lifting its spending plans for artificial intelligence. The company said fourth-quarter revenue should be $73 billion to $76 billion, above estimates, and Ed Ludlow said revenue hit $64.2 billion, its highest quarterly total ever. He argued that pricing power in ads, not volume, is doing the heavy lifting, even as Meta keeps pushing investors to focus on AI spending and long-term monetization.
The biggest reaction point was the capex outlook. Meta raised fiscal 2026 capital expenditures to $135 billion to $145 billion, narrowed from the prior $130 billion to $145 billion range, and lifted total expenses to $175 billion to $179 billion after including a roughly $9.9 billion legal charge. Ludlow said the market seems more willing to tolerate negative free cash flow when the business scale and revenue growth are this large.
The company also unveiled a new publicly listed nonvoting Class C stock, effective January 2027. Ludlow said the structure gives Meta flexibility to finance growth, M&A and AI talent without diluting Mark Zuckerberg’s control. The filing also tied the move to California’s Proposition 40, warning that Zuckerberg could relocate if the billionaire tax measure passes, while Meta declined to provide fiscal 2027 revenue guidance.
Key takeaways
- Meta lifted 2026 capex to $135 billion to $145 billion, reinforcing that its AI investment cycle is still accelerating.
- Ed Ludlow said Meta’s ad business remains the core engine, with pricing strength doing more work than volume.
- The company’s new nonvoting Class C stock appears designed to raise equity currency without diluting Mark Zuckerberg’s control.
- Meta did not provide a fiscal 2027 revenue outlook, leaving investors with more uncertainty about next year’s top line.
- The filing linked Zuckerberg’s possible relocation to California’s Proposition 40, adding a political risk layer to the share-structure move.
Notable quotes
“Meta seeing fourth quarter revenue 73 billion to 76 billion folks. That is above estimates of 73.57 billion”
“The company also establishing a new non- voting class C common stock”
“the advertising storying is just very strong. It's pricing. It's not volume”
“this is as much about Meta um creating non voting stock to give it kind of equity currency in the AI era without impacting Mark's control”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. This is a breaking news update from Bloomberg. Instant reaction and analysis from our 3,000 journalists and analysts around the world. — Meta shares already bouncing around in the aftermarket. The company just out with its earnings. Here are the red headlines on the Bloomberg. Let's get to outlook. Meta seeing fourth quarter revenue 73 billion to 76 billion folks. That is above estimates of 73.57 billion. The company also establishing a new non- voting class C common stock. There was early reports was it from Semaphore that talked about this 20 today.
Yeah, exactly. Just hit it. — We've got what um looking at Meta right now up about one and a half% here in the aftermarket. Lots more metrics to come though on this one. So, we're going to keep a watch on it.
Yeah. uh metal lifting its expense outlook to incorporate a $9.9 billion legal charge. The company sees fiscal year capex 135 to $145 billion.
So it narrowed that range because it earlier saw 130 to 145. That's now a redhead just after I mentioned that again the fiscal year capex 135 to 145 billion. It saw 130 to 145 billion.
So it makes sense that as we get further along in the fiscal year, the company also sees total expenses 175 billion to 179 billion. So that's an increase because earlier it saw 165 billion to $169 billion. Shares are off their best levels post earnings as investors continue to digest this after hours.
Okay, let's bring in Ed Lello because he knows about all this stuff. Uh Ed is joining us from San Francisco. He's the host of Bloomberg Tech on Bloomberg Television.
Ed, um I wanted to start with with actually with meta with meta right now.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- meta ai capex
- nonvoting stock class
- earnings outlook
- investor sentiment
- after-hours share reaction
Companies and tickers mentioned
- META
- Meta Platforms
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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