Fortune· 2h ago· 1 min read
The AI trade is coming to a realization: America's best businesses are turning into utilities.
Such is the fate that befalls Meta , whose shares fell as much as 10% in after-hours trading Wednesday after the company missed earnings due to costs ballooning 55% (Meta's stock later recovered some ground and was down 7%). Its operating income fell 8%, net income dropped 14%, and it barely eked out just $784 million of free cash flow—just narrowly missing falling into negative territory and well below the roughly $12 billion in free cash flow the company has averaged over the previous eight quarters.
Meta's revenue in Q2 was up 28% from a year earlier , beating expectations, but operating income at Family of Apps, the segment containing Facebook, Instagram, WhatsApp and Messenger, fell to $23.4 billion from $25.0 billion.
So, its core business grew revenue, but made less money doing…
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