The Meta logo. [Reuters]
The Meta logo. [Reuters]

Amid growing concerns about the sustainability of AI investment — including soaring costs and financing risks — Meta and SpaceX have posted strong quarterly results, helping to calm market anxieties.

As big tech companies demonstrate profitability in both their core and emerging businesses while reaffirming their commitment to aggressive infrastructure spending, expectations are rising that dampened AI investor sentiment could soon recover.

Meta on Thursday reported third-quarter sales of $64.6 billion, up 26 percent from a year earlier, beating Wall Street analysts' consensus estimate of around $63.3 billion.

Earnings per share came in at $3.83, a sharp increase from $1.05 in the same period last year, though the figure fell short of the market's expectation of $6.54 due to one-time costs from legal settlements with state governments over youth protection lawsuits. The company said EPS would have reached $7.40 had those one-time charges been excluded.

The detail that drew the most market attention in the earnings release was Meta's unwavering commitment to AI investment. The company spent $34.91 billion in capital expenditure during the third quarter alone on AI model development and data center construction. It also raised the lower end of its full-year capital expenditure guidance by $5 billion — from a range of $130 billion to $145 billion to $135 billion to $145 billion — signaling its intention to press ahead with investment.

Meta is also putting in place financing mechanisms to support its massive spending. The company's board approved the issuance of a new class of non-voting common stock, Class C shares, a move designed to secure stable funding for its enormous AI infrastructure buildout while preserving CEO Mark Zuckerberg's control over the company. The new share class takes effect Jan. 19 next year, and holders of Meta's Class A and Class B shares will receive one Class C share for each share they hold as a dividend.

Meta also expressed confidence in Muse, its personal AI agent launched in early September, saying the number of users who have set up the service in the United States and Canada has already surpassed 10 million, with 25 percent of them actively using it every day. The company said it aims to grow Muse's global user base to more than 1 billion over the coming years. Markets responded positively to the earnings and investment signals, with Meta's share price rising 0.47 percent in regular trading and gaining more than 2 percent in after-hours trading.

Tesla, which also reported results Thursday, delivered a resilient performance despite concerns about a slowdown in the global electric vehicle market. The company's third-quarter sales fell 0.2 percent year-on-year to $28.05 billion. Notably, even as Tesla more than doubled its capital expenditure on AI and humanoid robots — spending $4.73 billion in the quarter compared with $2.25 billion a year earlier — free cash flow swung back to positive within a single quarter.

SpaceX, the space company Elon Musk leads alongside Tesla, also showcased strong AI momentum in its previously reported third-quarter results. The company said revenue surged 161 percent year-on-year and that it turned profitable for the first time since its listing. EPS of $0.35 more than doubled the market consensus of $0.14. AI business sales were particularly striking, reaching $7.56 billion — roughly triple the prior quarter — and surpassing Starlink satellite internet revenue of $5.25 billion for the first time in history.

Markets are also watching the possibility of a future merger between Tesla and SpaceX. Should the two companies combine, the result would be a technology giant spanning electric vehicles, autonomous driving, launch vehicles, satellite communications and AI.

All three companies are among the most heavily held stocks by Korean retail investors who invest in overseas markets. According to data from the Korea Securities Depository's securities information portal SEIBro, as of Tuesday Tesla ranked first among foreign securities held by Korean investors, with a custody value of $21.77 billion. SpaceX ranked 17th at $2.8 billion, and Meta ranked 26th at $1.51 billion. In terms of net purchases this year through Wednesday, SpaceX was the top stock bought by Korean retail investors, with net purchases totaling $2.73 billion.

"SpaceX's strong results and optimistic outlook in its neo-cloud business have improved investor sentiment toward AI growth stocks," said An So-eun, a researcher at KB Securities. "Although Meta's third-quarter free cash flow turned negative, the company expressed confidence that once sales begin to grow in earnest through diversification of its AI revenue streams, it will be able to turn profitable again immediately."


jiyun@heraldcorp.com