Mark Zuckerberg’s $32 Billion Loss: Meta’s 72% Drop Due to Aggressive AI Investments

This article should not be considered as investment advice, and the author does not hold positions in any of the mentioned stocks.

Meta’s Stock Surge Following Impressive Earnings Report

Shares of Meta Platforms, the parent company of Facebook, experienced a significant increase of 12% today. This surge followed the company’s announcement of robust quarterly earnings that notably exceeded analyst expectations for both revenue and earnings per share (EPS).Specifically, Meta reported revenues of $47.52 billion along with an EPS of $7.14 for the second quarter, surpassing estimates of $44.80 billion for revenue and $5.92 for EPS. Moreover, Meta provided guidance for Q3 revenue projected between $47.5 billion and $50.5 billion, surpassing the $46.14 billion forecasted by analysts.

Despite the impressive earnings, Meta’s financials reveal a concerning trend: the firm burned through a staggering $32 billion in cash during the first half of 2025. This cash burn occurred alongside an increase in the lower end of the company’s capital expenditure guidance, rising from $62 billion to $64 billion.

Funding AI Expansion: Meta’s Aggressive Capital Expenditure Strategy

In a recent earnings call, CFO Susan Li disclosed that Meta’s capital expenditures in 2025 are expected to soar by approximately $30 billion compared to 2024. Li highlighted the ongoing dynamics of infrastructure planning, predicting sustained significant growth in expenditures as the company aggressively invests in AI capabilities and operational demands for its business.

A closer examination of Meta’s balance sheet indicates the impact of major investments in AI. In 2025 alone, Meta has committed substantial resources, including a $14.3 billion acquisition of ScaleAI and the establishment of its Superintelligence Lab. CEO Mark Zuckerberg has announced intentions to invest hundreds of billions of dollars in new AI data centers to propel the company forward.

Meta Platforms balance sheet showing assets, liabilities, and equity as of June 30, 2025, and Dec 31, 2024. — Meta’s balance sheet as of June 30, 2025.

Analyzing Meta’s Cash Flow and Financial Health

As of June 30, 2025, Meta reported merely $12 billion in cash and equivalents, which represents a remarkable drop of 72% from its cash reserves at the end of December. The $32 billion cash outflow during the first half of 2025 indicates an acceleration in financial draining, particularly as $15 billion was used in the first quarter alone.

A further exploration of Meta’s cash flow statement reveals that operating activities generated $25.6 billion, yet the company spent $26 billion on investments. Notably, 63% of this investment expense, amounting to $16.5 billion, was directed toward property and equipment acquisitions. Although Meta earned $14.2 billion from securities, the company simultaneously spent $15 billion on equity investments, likely linked to its ScaleAI integration.

When comparing these figures with the previous year, investment cash outflows for Q2 show a staggering 104% increase. While Meta’s stock has risen by 29% year-to-date in 2025, investors should note the stock’s steep decline of 64% in 2022, a drop driven by Zuckerberg’s ambitious but costly endeavors in the metaverse. The recent AI momentum in 2023 has provided a new focal point for investors as Meta shifts its resources toward developing advanced data center capabilities.

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