Meta's AI spending cut free cash flow 91% to $784 million, sending shares down 9% in premarket tradeA 3D-printed Meta logo and word "AI" are seen in this illustration created on July 20, 2026. Selling compute could ease pressure on cash flow but would also divert resources from its own efforts to develop AI models and services. Despite a 23% drop in free cash flow, the company exceeded expectations for Azure cloud growth and Copilot adoption, sending its shares up about 8%. Beyond broad references to subscription services and enterprise products, however, Zuckerberg provided few details on how those businesses would generate returns sufficient to justify Meta's massive AI spending. Spending like a cloud giant"Meta is spending like a hyperscaler without a hyperscaler's business model," said Josh Gilbert, APAC market analyst at eToro.