Meta investors are more freaked out by the company’s AI spending than you were by your Sephora receipt at checkout.

The tech giant upped its 2025 capital expenditure guidance to between $70 and $72 billion from its previous $69 billion when it reported Q3 earnings yesterday—and forewarned even more gargantuan spending in 2026. Shares fell 11.33% today on the heels of the earnings report.

That wasn’t the only news that spooked Meta investors: The company reported earnings per share of $1.05, far under estimates of $6.72. But to be fair, that steep miss was due to a one-time massive tax charge that hit the company hard.

The company’s operating margin dropped 40%, down from 43% last year. The reason? AI hiring spiked research and development expenses up 28%. Revenue, however, came in strong for the quarter. Meta reported that its revenue jumped 26% to reach $51.2 billion for the quarter.

Today, right after the earnings miss, the company is pricing a nearly $30 billion bond sale, according to the WSJ.

All roads lead back to the AI question

While $71 billion is certainly no number to scoff at, Microsoft, Alphabet, and Meta all reported earnings yesterday, and all three companies announced major spending. So why is Meta the one that investors are punishing?

Part of the reason is that Microsoft and Alphabet already make money from AI in their cloud computing businesses, according to the WSJ, which makes analysts and investors give them less of a hard time about spending so much on building AI infrastructure.

In addition, Meta’s spending plan is also just plain higher compared to its Silicon Valley peers. To put its guidance in perspective, capital spending of $72 billion this year would equal 37% of the company’s projected revenue.

But CEO Mark Zuckerberg doubled down on Meta’s expensive AI bill during a call with analysts, arguing that the technology will help the company better advertise and recommend content to users of its social media apps Instagram and Facebook.

Now the question is: Will Meta upping the ante make its peers want to spend more, too? Or will that form of FOMO just be too expensive? —LB

🟢 What’s up

• Eli Lilly jumped 3.81% after reporting better-than-expected earnings and revenue, boosted by strong demand for its weight-loss and diabetes drugs.
• Cardinal Health beat earnings expectations and raised its full-year guidance. Shares skyrocketed 15.43%.
• Metsera soared 22.06% after Novo Nordisk offered $6 billion in cash to acquire the obesity drug developer, setting off a potential bidding war with Pfizer.

What’s down

• Starbucks dipped 1.21% after missing earnings forecasts, although the coffee chain reported its first increase in same-store sales in two years.
• Core Scientific shareholders shot down the crypto miner’s sale to rival CoreWeave, terminating the lengthy M&A process. Core Scientific dropped 0.14%, CoreWeave 6.34%.
• Cigna tumbled 17.39% after the insurance firm reported that its profit margins from its pharmacy benefit services would drop steeply over the next two years.
• Roblox fell 15.51%, despite posting Q3 bookings that beat expectations and strong fourth-quarter guidance. The culprit is the gaming company’s wider-than-expected Q3 loss, which came in at $257.4 million.
• FMC Corp. plunged 46.52% after the chemical manufacturing firm cut its quarterly dividend by a steep 86% down to $0.08 per share from its previous $0.58 per share, to help “prioritize debt reduction.”
• Microsoft fell 2.90% today, even after beating top and bottom line earnings expectations. Investors were partially freaked out by the tech’s giant’s hefty AI spending.
• Nvidia slid 2.04% after investors were disappointed that the meeting between President Trump and Chinese leader Xi Jinping didn’t immediately result in chip export controls being lifted.

If you ask the PR reps wandering around Nvidia’s GTC event in Washington, DC whether or not we’re in an AI bubble, they’re going to tell you the innovation—and gains—are just getting started.

But as we at Morning Brew traversed through the gigantic convention center, talking to engineers, founders, and tech researchers, we were curious what the average person really thought about the AI bubble. Here are a selection of their responses:

• “Some people compare this to the dot com bubble, but I think it’s the wrong comparison. Machine learning has already been in our lives for years. But I do think we are in a sort of AGI (artificial general intelligence) bubble, because we just haven’t defined it yet.” —Ksenia, tech researcher and writer
• “I do not think it’s a bubble. It’s about to be a ubiquitous part of life, and is here to stay. We have to figure out how to live with it.” —Sarah, sales rep at a tech company
• “I think we are, but it’s not necessarily a bad thing. As time goes on, we’ll start seeing some companies fail, but this is a major shift in how society functions.” —Daniel, engineer at a defense tech startup
• “It’s a fine line. There’s definitely a lot of hype, for sure. But it’s not like the Metaverse, there’s companies that are actually solving real problems.” —Anubhuv, AI engineer at startup

Is AI in a bubble? Reply to this email and send us your thoughts.—LB

Chipotle shares tanked 18.18% today after the fast-casual chain slashed its full-year forecast for same-store sales for the third quarter in a row. That wasn’t the only news that left a bad taste in investors’ mouths: Management said that the company was also dealing with declining traffic because young people can no longer afford their beloved burrito bowls. The pros aren’t optimistic about a comeback, either: At least five analysts have cut their price targets since Chipotle reported earnings, according to CNBC.

• EPS: $0.29 adjusted, matching expectations
• Revenue: $3 billion, below forecasts of $3.03 billion

Carvana shares dipped 13.78% today even as revenue rolled in above forecasts for the third straight quarter, driven by a 44% surge in car sales. But even though net income more than doubled from a year ago, earnings still came in below expectations—a letdown for a stock that’s rallied in 2025. Some of the drop may be chalked up to profit-taking, but broader worries about the auto industry’s health, including recent bankruptcies and pressure from inflation, also weighed on sentiment.

• EPS: $1.50 adjusted beat $1.30 expected
• Revenue: $5.65 billion, surpassing forecasts of $5.1 billion

🛒 eBay shares fell 15.88% today despite strong third-quarter results. The drop followed a weaker-than-expected fourth-quarter forecast, typically the busiest season for retailers: eBay projected adjusted earnings of $1.31 to $1.36 per share, just below the $1.39 analysts were expecting. Adding to investor concerns, CFO Peggy Alford pointed to stricter customs rules, including the removal of the de minimis exemption, as key challenges for international small businesses.

• EPS: $1.36 adjusted, vs $1.33 expected
• Revenue: $2.82 billion beat forecasts of $2.73 billion

• Coming soon to a market near you: OpenAI appears to be preparing for an IPO at an eye-watering $1 trillion valuation.
• BlackRock is the latest finance titan to get burned by fraud in a muddy corner of the growing private credit industry known as asset-based finance.
• Berkshire Hathaway has underperformed the S&P 500 since Warren Buffett announced his retirement in May, erasing the fabled “Buffett premium.”
• Palantir is suing two employees for allegedly stealing company data to build a rival firm.
• JPMorgan is jumping on the blockchain bandwagon: The bank just tokenized one of its private equity funds to make it easier for clients to invest in.

We were supposed to get a look at PCE tomorrow, but with the government still shut down, we’ll have to go without a look at inflation for a little while longer. Which is fine for us, but maybe not so good for a Federal Reserve that’s divided about direction and could use some data to help determine the next monetary policy decision in a few months.

As for earnings, the pace has slowed a bit, but there’s still plenty of big names to keep an eye on, including Chevron, Exxon Mobil, AbbVie, Colgate-Palmolive, T. Rowe Price, Charter Communications, Dominion Energy, and Church & Dwight.