Meta drops 7% after AI spending turns free cash flow negative

Meta shares fell nearly 7% Thursday after the company posted negative free cash flow in the third quarter and increased the low end of its full-year capital spending forecast as it pours more money into AI. Free cash flow was negative $2.12 billion. Meta said it now expects 2026 capex of $135 billion to $145 billion, up from a prior range that started at $130 billion. The company also disclosed plans to create a new class of nonvoting Class C stock to preserve its founder-led structure and help finance growth. Revenue rose 26% from a year earlier to $64.6 billion, topping analyst estimates cited by CNBC, while investors also pushed Meta's five-year credit default swaps to all-time highs.