Meta's shares fell more than 6 percent in after-hours trading after it issued a third-quarter revenue outlook that missed market expectations and showed deteriorating cash flow due to expanded investment in AI infrastructure.

Meta posted second-quarter revenue of $60.8 billion, above the market estimate of $60.17 billion. Earnings per share (EPS) came in at $6.18, missing the estimate of $7.22.

Meta forecast revenue of $61.0 billion to $64.0 billion for the current quarter. The midpoint of $62.5 billion falls short of the market expectation of $63.15 billion. Based on current exchange rates, Meta expects foreign exchange to have a negative impact of about 1 percentage point on the year-on-year revenue growth rate.

Daily active people (DAP) were tallied at 3.6 billion, slightly below the market estimate of 3.61 billion.

Aggressive AI investment is also weighing on cash generation. Meta raised its capital expenditure (CAPEX) outlook for this year to $130.0 billion to $145.0 billion from $125.0 billion to $145.0 billion. Free cash flow in the second quarter fell to $784 million from $8.55 billion a year earlier.

Meta is also expanding data centre investment to strengthen its AI competitiveness. It recently announced a $14.0 billion data centre in El Paso, Texas, to be pursued jointly with BlackRock, and plans to invest more than $50.0 billion in the massive 'Hyperion' project in Louisiana. It also unveiled a plan in July to build a $9.0 billion data centre in Alberta, Canada.

Total costs in the second quarter rose 55 percent year on year to $42.03 billion. The figure includes $2.4 billion in litigation-related costs and $1.18 billion in severance costs from restructuring that began in May.

Net profit fell 13 percent to $15.85 billion from $18.34 billion in the same period a year earlier.

Reality Labs, which oversees virtual reality (VR) and AI wearable businesses, recorded revenue of $431 million but an operating loss of $4.6 billion. The loss was smaller than the $5.07 billion expected by the market.