On Monday we said META’s earnings would give us an early read on investors’ tolerance for AI capital spending.
On Monday we said META’s earnings would give us an early read on investors’ tolerance for AI capital spending. The verdict is in, and it isn’t kind. META beat on revenue and earnings, then raised its 2026 capex floor to $135–145 billion while posting negative free cash flow for the quarter. The after-hours pop to $724 has faded. As of this writing, META trades down about 2% to $681. Meanwhile, TSLA cut its capex plan and pushed its robotaxi timeline into 2027, and it’s down nearly 4% as well. Spend more. Spend less. The market is punishing both.
Predictably, the whole AI stack is suffering. There’s a premarket rotation into cash flow we can count today. Think PG, KO, CL, and WMT. That said, it could be worse for the tech sector. Nasdaq futures are down nearly 500 points, but this decline does not really indicate any major panic. Dip buyers have shown up before on mornings like this. Consider also that the 10-year bond yield has dropped to 5.03%, well below the 5.30% mark set at the last auction a few weeks ago. Bonds might be benefitting from a safe haven bid sparked by stock market volatility and by sovereign debt concerns in Europe, but lower rates will have a marginally beneficial impact on capital cost in the tech sector, whatever the cause.
Keep an eye out for those dip buyers after 10 am, and keep watch on our trading board for setups as they emerge in real time.
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