Meta Faces Major Loss as US$16 Billion Tax Charge Hits Profit

Meta’s shares fell by over 8% in after-hours trading on Wednesday following the announcement of a significant tax charge that greatly impacted its quarterly profit. The company disclosed that a one-time tax liability of approximately US$16 billion resulted from provisions related to former President Donald Trump’s “One Big Beautiful Bill Act.” As a consequence, Meta’s net income for the recent quarter would have reached US$18.64 billion had it not been for this charge.

Despite the sharp decline in profit, Meta’s quarterly revenue surpassed analyst expectations, totaling US$51.2 billion. This figure marks a notable increase of 26% compared to the same period last year. The robust revenue growth reflects the continued demand for Meta’s suite of platforms, including Facebook, Instagram, and WhatsApp.

Increased Investment in Artificial Intelligence

In response to its evolving business strategy, Meta raised its forecast for capital expenditures this year. The company now anticipates spending between US$70 billion and US$72 billion, indicating a commitment to invest heavily in artificial intelligence (AI). This investment aims to position Meta as a leader in the rapidly advancing AI landscape.

The financial challenges posed by the tax charge underscore the complexities faced by large corporations in navigating the evolving regulatory environment. Meta’s ability to generate substantial revenue despite these hurdles reflects its strong market position, although the significant tax hit has raised concerns among investors about future profitability.

As Meta continues to invest in technology and innovation, its performance will be closely monitored by analysts and investors alike. The company’s strategic moves will likely influence its stock performance and overall market perception in the coming months.