Meta sell-off drags US tech stocks lower as AI spending fears flare up
News Source
β’Thu, 22 Oct 2026 18:15:32 GMT
π° What Happened
Meta shares fell about 6% on Thursday and dragged other US tech stocks down with them. Investors fear that huge spending on artificial intelligence is eating into profits.
Meta's third-quarter revenue rose 26% to $64.6bn, beating forecasts. Reported earnings per share were $3.83, against $5.75 expected, though the company said the figures may not line up exactly. Free cash flow turned negative as it spent heavily on AI data centres and chips.
Tesla also dropped after its results, even though it beat forecasts. Higher oil prices added to the gloom.
π The Backstory
Since ChatGPT arrived in 2022, the biggest tech firms have raced to build AI data centres. They have promised hundreds of billions of dollars in spending on chips, power and buildings.
For two years, investors accepted the cost because share prices kept climbing. That mood is shifting. Wall Street now wants to see the money coming back as profit, not just as growth.
The sell-off spread across Asia too, hitting chip makers in South Korea, which supply much of the hardware behind the AI boom.
π― Why It Matters
Tech giants sit inside many pension and savings funds. When their shares slide, ordinary retirement accounts can lose value even if you never bought a single stock.
Meta shares fell about 6% on Thursday and dragged other US tech stocks down with them. Investors fear that huge spending on artificial intelligence is eating into profits.
Meta's third-quarter revenue rose 26% to $64.6bn, beating forecasts. Reported earnings per share were $3.83, against $5.75 expected, though the company said the figures may not line up exactly. Free cash flow turned negative as it spent heavily on AI data centres and chips.
Tesla also dropped after its results, even though it beat forecasts. Higher oil prices added to the gloom.
Since ChatGPT arrived in 2022, the biggest tech firms have raced to build AI data centres. They have promised hundreds of billions of dollars in spending on chips, power and buildings.
For two years, investors accepted the cost because share prices kept climbing. That mood is shifting. Wall Street now wants to see the money coming back as profit, not just as growth.
The sell-off spread across Asia too, hitting chip makers in South Korea, which supply much of the hardware behind the AI boom.
Tech giants sit inside many pension and savings funds. When their shares slide, ordinary retirement accounts can lose value even if you never bought a single stock.