Meta Platforms reported record second-quarter revenue of $60.8 billion on Tuesday, July 29, 2026, then watched its stock drop roughly 10% in after-hours trading as investors fixated on a full-year capital-expenditure range of $130 billion to $145 billion and free cash flow that collapsed from $8.5 billion a year ago to just $784 million. The number Meta wanted to sell — 28% revenue growth — was not the number the market priced.
The Capex Reset
Q2 capex reached roughly $31 billion, part of Chief Executive Mark Zuckerberg's expanded AI infrastructure program covering data-center construction, custom silicon and inference capacity for Llama 4 across Facebook, Instagram and WhatsApp. Meta lifted the low end of full-year 2026 capex by $5 billion, held the top at $145 billion, and raised total expense guidance to $165-$169 billion including $2.4 billion in legal charges. Third-quarter revenue guidance of $61-$64 billion signals ad demand is still accelerating; the guidance provides no line of sight on when the spending program moderates.
The Cloud Business Meta Doesn't Have Yet
On the earnings call, Zuckerberg sketched a future enterprise cloud business aimed at renting Meta's AI infrastructure to third parties. He offered no product timeline, no pricing model and no competitive framing against Amazon Web Services, Google Cloud or Microsoft Azure's newly-crossed $100 billion annual run rate. The absence of specifics turned what he framed as a revenue upside into a cost signal for investors already tracking the free-cash-flow trajectory.
Ad Engine Still Working
Advertising remained the balancing line. Ad revenue of $59.4 billion was up 27%, with impressions +14% and price per ad +12%. Operating income fell 8% to $18.8 billion despite the top-line beat as infrastructure amortization began to hit the income statement. Diluted EPS came in at $6.18, down 13% and roughly a dollar short of consensus. Meta's 3.6 billion daily users across Facebook, Instagram, WhatsApp and Threads remain the world's largest ad audience, but the arithmetic pushing Q2 free cash flow down 91% is the same arithmetic that will decide when the AI investment inflects.
The Comparison Investors Are Making
Meta's report dropped a day before Microsoft delivered a $90 billion quarter with Azure up 43%, offering the market a directly comparable data point on AI infrastructure ROI. Microsoft is billing the AI cycle. Meta is still funding it. Until Zuckerberg produces a revenue architecture on the enterprise side — or the Advantage+ ad-serving improvements convert clearly into pricing power — the free-cash-flow line is the number to watch. The same day, semiconductor stocks entered bear-market territory on the broader AI capex debate, and Anthropic-AMD's $5B GPU pact underscored how much upstream demand Meta's spend represents.
Reporting based on coverage from CNBC, Axios, Fortune and Meta's Q2 2026 earnings release.