why did meta stock drop

Meta Platforms (META) stock is dropping primarily due to a combination of substantial one-time tax charges tied to policy changes and investing plans, plus concerns about AI-related spending accelerating costs. Recent reports indicate market reactions were amplified by a $16 billion one-time tax expense linked to a new U.S. tax framework, which significantly reduced quarterly earnings, even as revenue topped estimates. Additionally, management signaled capital expenditures and AI investments would rise more quickly, which raised worries among investors about the near-term profitability of such aggressive spending. As a result, the stock faced a pronounced single-day sell-off and continued pressure as investors reassessed the trade-off between near-term earnings hits and longer-term AI-driven growth.