Meta AI Investments: Free Cash Flow Plunges 91%

Meta's free cash flow plunged 91% in the second quarter of 2026, falling to $784 million. This significant drop is largely due to massive investments in its AI infrastructure. Here's the thing: while net cash from operating activities actually rose by 25%, capital expenditures for servers, data centers, and networking surged 83% to over $31 billion. This nearly wiped out all the free cash flow. What's interesting is that parts of Meta's AI investment are already delivering returns, with advertising revenue climbing 27%. This is because AI is improving content recommendations and ad matching. Meta expects capital expenditures to reach up to $145 billion this year. The company's CEO notes they are investing now for future value. The bottom line: Meta's stock fell nearly 10% after these results, showing that Wall Street is currently rewarding financial restraint in AI spending.