Mayank Bansal, CFA
Mayank Bansal is a CFA Charterholder and heads the Equity Research team at Kapitales Research, with over 5 years of experience analysing global equity markets. He leads fundamental, data-driven research combining rigorous financial analysis with macro trends.
AI Spending Scare Hits Global Tech as Meta Slides 7% and ASX Tech Stocks Follow
Meta description: Meta Platforms fell 6.98% to US$648.85 after Q3 results; NextDC fell 5.91% to AU$5.41 and WiseTech Global 3.90% to AU$39.40.
Highlights
Introduction
An AI spending scare swept global tech stocks after Meta Platforms (NASDAQ: META) reported a quarter of negative free cash flow. The owner of Facebook and Instagram posted its third-quarter results on Wednesday, US time.
Meta shares fell 6.98% to US$648.85, on turnover about twice the 20-day average. The selling extended to chip stocks and to Australian tech stocks on Friday.
What Meta Reported
Revenue was US$64.60 billion for the three months to 30 September, up 26% on a year earlier. Net income was US$9.86 billion and diluted earnings per share were US$3.83.
Spending rose sharply. Quarterly capital spending, counting finance lease principal repayments, came to US$34.91 billion. Free cash flow came in at minus US$2.12 billion.
Costs also included a US$9.89 billion charge tied to an agreement with US state attorneys general over teen mental health litigation. Total costs and expenses rose 68% to US$51.61 billion. As a result, operating income fell 37% to US$12.99 billion.
The Capex Outlook and New Share Class
For 2026, Meta now sees capex of US$135–145 billion, against its earlier forecast of US$130–145 billion. The floor of that range is now US$5 billion higher. It also guided fourth-quarter revenue to US$73–76 billion.
The board also approved a new, non-voting Class C share class that will be publicly listed, effective in January 2027. Meta said the new class gives it a way to fund growth, employee pay and possible acquisitions. Existing shareholders are set to receive one Class C share per existing share through a stock dividend.
Nasdaq and Chip Stocks Sell Off
The Nasdaq Composite fell 2.60% to 26,008.86 on Thursday. The S&P 500 lost 1.21% to 7,663.43.
Semiconductors took the heaviest hit. The Philadelphia Semiconductor Index slid 6.72% to 10,731.98. Nvidia Corporation (NASDAQ: NVDA) fell 4.40% to US$212.21, and Lam Research Corporation (NASDAQ: LRCX) dropped 11.76% to US$230.15 after its own quarterly results.
Share Price Movement
Australian tech stocks were lower on Friday. The S&P/ASX 200 Information Technology index was down 1.82% at 1,585.8, while the benchmark S&P/ASX 200 was down 0.21% at 8,775.1.
Data centre operator NextDC Limited (ASX: NXT) was down 5.91% at AU$5.41. On 21 October, NextDC revised its FY27 guidance after delays to grid power works for its M3 Melbourne data centre.
Logistics software group WiseTech Global Limited (ASX: WTC) was down 3.90% at AU$39.40.
Not every tech name fell. Xero Limited (ASX: XRO) was up 0.14% at AU$63.79 and TechnologyOne Limited (ASX: TNE) up 0.85% at AU$32.01.
What Investors Should Watch
Conclusion
Meta's result showed strong revenue growth but also a quarter of negative free cash flow as capital spending climbed. Its shares fell sharply, along with chip stocks, and ASX tech stocks were also lower on Friday. NextDC and WiseTech Global were among the larger ASX decliners. Upcoming results from other big US tech companies are the next data points for the AI trade.
Sources: ASX market data; company announcements; official statements.
Market data as at: ASX prices intraday at 11:51 AM AEDT, Friday 23 October 2026; US prices at the Thursday 22 October close, 7:00 AM AEDT Friday 23 October 2026.
Note- All data presented is based on information available at the time of writing.
Disclaimer for Kapitales Research
The materials provided by Kapitales Research, including articles, news, data, reports, opinions, images, charts, and videos ("Content"), are intended for personal, non-commercial use only. The primary goal of this Content is to educate and inform readers. This Content is not meant to offer financial advice, nor does it include any recommendation or opinion that should be relied upon for making financial decisions. Certain Content on this platform may be sponsored or unsponsored, but it does not serve as a solicitation or endorsement to buy, sell, or hold any securities, nor does it encourage any specific investment activities. Kapitales Research is not authorized to provide investment advice, and we strongly advise users to seek guidance from a qualified financial professional, such as a financial advisor or stockbroker, before making any investment choices. Kapitales Research disclaims all liability for any direct, indirect, incidental, or consequential damages arising from the use of the Content, which is provided without any warranties. The opinions expressed by contributors or guests are their own and do not necessarily reflect the views of Kapitales Research. Media such as images or music used on this platform are either owned by Kapitales Research, sourced through paid subscriptions, or believed to be in the public domain. We have made reasonable efforts to credit sources where appropriate. Kapitales Research does not claim ownership of any third-party media unless explicitly stated otherwise.
Customer Notice
Nextgen Global Services Pty Ltd trading as Kapitales Research (ABN 89 652 632 561) is a Corporate Authorised Representative (CAR No. 1293674) of Enva Australia Pty Ltd (AFSL 424494). The information contained in this website is general information only. Any advice is general advice only. No consideration has been given or will be given to the individual investment objectives, financial situation or needs of any particular person. The decision to invest or trade and the method selected is a personal decision and involves an inherent level of risk, and you must undertake your own investigations and obtain your own advice regarding the suitability of this product for your circumstances. Please be aware that all trading activity is subject to both profit & loss and may not be suitable for you. The past performance of this product is not and should not be taken as an indication of future performance. Disclosure: The information mentioned above has been sourced from the company reports and a third-party database, i.e. Koyfin. Investors are advised to use strict stop-loss to protect their investments in case of any unfavorable/uncertain market events.
Kapitales Research, Level 13, Suite 1A, 465 Victoria Ave, Chatswood, NSW 2067, Australia | 1800 005 780 | info@kapitales.com.au