Meta Platforms‘ stock dropped more than 10% Thursday as skepticism about the payoff from its aggressive artificial intelligence spending plans overshadowed strong results.

The social media giant lifted its 2025 capital expenditures guidance as it races against competitors to build out advanced AI tools. Meta now expects capex to range between $70 billion and $72 billion, versus prior guidance of $66 billion to $72 billion.

CEO Mark Zuckerberg defended the company’s ambitious spending plans during the earnings call on Wednesday.

“It’s pretty early, but I think we’re seeing the returns in the core business,” he said. “That’s giving us a lot of confidence that we should be investing a lot more, and we [want to] make sure that we’re not underinvesting.”

Zuckerberg said the company is “aggressively” preemptively building up capacity to prepare for the arrival of superintelligence, where Meta will be “ideally positioned for a generational paradigm shift in many large opportunities.”

Like its peers, Meta has shelled out billions to beef up its AI offerings in an increasingly competitive landscape — and it isn’t the only one. On Wednesday, Alphabet boosted its capex forecast to $91 billion to $93 billion, and Microsoft said it expects heightened spending growth this fiscal year.

Earlier this year, Meta invested $14.3 billion in AI startup Scale AI and lured its CEO Alexandr Wang to lead its AI initiative called Superintelligence Labs with former GitHub CEO Nat Friedman.

Meta has also inked several new cloud deals to build out AI infrastructure.

For the third quarter, Meta reported adjusted earnings of $7.25 per share on $51.24 billion in revenue and topped Wall Street’s estimates.

Revenues grew 26% from a year ago and the company reported a $15.93 billion tax charge from the rollout of President Donald Trump’s One Big Beautiful Bill Act.

— CNBC’s Jonathan Vanian contributed reporting

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