Meta Spent Almost Every Dollar It Earned Last Quarter on AI, Left With $784 Million and No Buybacks
About This Episode
Meta reported second-quarter results on July 29 showing $31.86 billion of operating cash flow and $31.08 billion of capital spending, leaving free cash flow of $784 million against $8.55 billion a year earlier. Costs rose 55%, the company bought back no stock, raised nearly $25 billion of debt, and the shares fell as much as 10% after hours. Hours earlier Microsoft spent even more on AI and was rewarded, because Azure crossed $100 billion in annual revenue.
Our Take
Meta earned $31.9 billion in cash last quarter and spent $31.1 billion of it on AI, ending with $784 million and no buybacks, and the market punished it 10% for building the same thing it rewarded Microsoft for renting out, which is the moment the AI buildout stops looking like software profits and starts looking like a utility financed on debt.