Meta AI Spending Surge and New Share Class Trigger Broad Tech Selloff

Meta Platforms unveiled plans to sharply increase its AI capital expenditure and introduce a new Class C nonvoting share structure, moves designed to let CEO Mark Zuckerberg raise funds for AI ambitions without diluting his control of the company. The Class C shares also carry a secondary purpose: keeping Zuckerberg anchored in California should a state wealth tax be enacted. The company's AI personal agent product, called Muse, drew comparisons to offerings from Amazon and Apple and was described by some analysts as a potential growth catalyst.

Wall Street reacted sharply. Meta stock fell more than 7% despite the company reporting strong third-quarter results, as investors focused on the scale of future spending commitments rather than current earnings. The selloff spread across the tech sector, dragging the Nasdaq down 2.6%, its worst single-day decline since June. The S&P 500 dropped roughly 1%.

Power-equipment suppliers tied to AI data center buildout took some of the heaviest hits as markets questioned how the broader AI expansion would be financed. GE Vernova fell 11%, Vertiv Holdings dropped 7%, and Eaton slid 6%. Treasury yields posted their biggest single-day drop since 2023 as investors sought safer assets, with bonds rallying sharply alongside a pullback in Bitcoin and gold. Hedge fund manager Bill Ackman, a Meta shareholder, pushed back against the negative sentiment, calling the stock "incredibly undervalued" and arguing that AI is already accelerating Meta's core business.