Episode summary
Earnings Special: Meta Boosts Bet on AI With Spending Outlook, New Stock Class | Bloomberg...
Bloomberg Surveillance
· · 19 min · Hosts: Tom Keene, Paul Sweeney, Lisa Mateo, Michael Barr, Carol Massar, Tim Stenovec · Guests: Ed Ludlow
Summary
Meta reported strong quarterly results, with revenue of $64.2 billion, up 26% year over year and above expectations, while the company’s ad business remained the main driver of growth. Ed Ludlow said the quarter was Meta’s highest revenue quarter ever, and that pricing in advertising, not volume, was doing the heavy lifting as AI improved targeting and monetization.
The bigger market focus was Meta’s spending outlook. The company raised its 2026 capital expenditures range to $135 billion to $145 billion and lifted total expense guidance as it absorbed a roughly $10 billion legal charge. Meta also did not provide a fiscal year 2027 revenue outlook, leaving investors to weigh the benefits of heavier AI investment against rising costs.
Meta also announced a new publicly listed non-voting class C common stock, effective January 2027. Ed Ludlow argued the move is not just about raising equity currency for AI, but also about preserving Mark Zuckerberg’s control and keeping him closely tied to the company. The filing also linked the structure to California’s proposed billionaire tax, with Meta warning Zuckerberg may relocate if Prop 40 passes.
Key takeaways
- Meta’s revenue rose 26% to $64.2 billion, and Ed Ludlow said it was the company’s highest quarterly revenue ever.
- Meta raised 2026 capex to $135 billion to $145 billion, signaling continued aggressive AI spending despite investor concerns.
- The company took about a $10 billion legal charge, which helped push adjusted EPS to $7.40 versus $3.57 reported.
- Ed Ludlow said the new class C stock is meant to preserve Mark Zuckerberg’s control while giving Meta more equity currency for AI-era growth.
- Meta did not give a fiscal year 2027 revenue outlook, leaving the AI trade and free-cash-flow debate open.
Notable quotes
“revenue of $64.2 2 billion is up 26% year-over-year. It's a beat of expectations, but for Meta as a as a moment in time, it's their highest revenue in a quarter ever”
“the capex range is just like we're well through the year. Um, and it's narrower 145 uh 35 billion to 145 billion on the capex side”
“How does this relate to Mark Zuckerberg who economically through his class A and class B has I think about 14% of the company but from a voting power perspective he owns 99.8%”
“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”
“Meta has guided investors on its impact, you know, on a forward-looking basis”
How the episode opens
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From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- meta earnings
- ai spending outlook
- capital expenditures
- nonvoting stock class
- after-hours stock movement
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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