Meta CEO Mark Zuckerberg defends AI spending: ‘We’re seeing the returns’

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20 hours ago

October 29, 2025

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Mark Zuckerberg, chief executive officer of Meta Platforms Inc., during the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 17, 2025.

David Paul Morris | Bloomberg | Getty Images

Meta CEO Mark Zuckerberg is sounding a familiar tune when it comes to artificial intelligence: better to invest too much than too little.

On his company’s third-quarter earnings call on Wednesday, Zuckerberg addressed Meta’s hefty spending this year, most notably its $14.3 billion investment in Scale AI as part of a plan to overhaul the AI unit, now known as Superintelligence Labs.

Some skeptics worry that the spending from Meta and its competitors in AI, namely OpenAI, is fueling a bubble.

For Meta’s newly formed group to have enough computing power to pursue cutting-edge AI models, the company has been building out massive data centers and signing cloud-computing deals with companies like Oracle, Google and CoreWeave.

Zuckerberg said the company is seeing a “pattern” and that it looks like Meta will need even more power than what was originally estimated. Over time, he said, those growing AI investments will eventually pay off in a big way.

“Being able to make a significantly larger investment here is very likely to be a profitable thing over, over some period,” Zuckerberg said on the call.

If Meta overspends on AI-related computing resources, Zuckerberg said, the company can repurpose the capacity and improve its core recommendation systems “in our family of apps and ads in a profitable way.”

Along with its rivals, Meta boosted its expectations for capital expenditures.

Capex this year will now be between $70 billion and $72 billion, compared to prior guidance of $66 billion to $72 billion, the company said.

Meanwhile, Alphabet on Wednesday increased its range for capital expenditures to $91 billion to $93 billion, up from a previous target of $75 billion to $85 billion. And on Microsoft’s earnings call after the bell, the software company said it now expects capex growth to accelerate in 2026 after previously projecting slowing expansion.

Alphabet was the only one of the three to see its stock pop, as the shares jumped 6% in extended trading. Meta shares fell about 8%, and Microsoft dipped more than 3%.

Zuckerberg floated the idea that if Meta ends up with excess computing power, it could offer some to third parties. But he said that isn’t yet an issue.

“Obviously, if you got to a point where you overbuilt, you could have that as an option,” Zuckerberg said.

In the “very worst case,” Zuckerberg said, Meta ends up with several years worth of excess data center capacity. That would result in a “loss and depreciation” of certain assets, but the company would “grow into that and use it over time,” he said.

As it stands today, Meta’s advertising business continues to grow at a healthy pace thanks in part to its AI investments.

“We’re seeing the returns in the core business that’s giving us a lot of confidence that we should be investing a lot more, and we want to make sure that we’re not under investing,” Zuckerberg said.

Revenue in the third quarter rose 26% from a year earlier to $51.24 billion, topping analyst estimates of $49.41 billion and representing the company’s fastest growth rate since the first quarter of 2024.

WATCH: Meta reports Q3 earnings beat, company takes one-time tax charge.

Technology

Corporate travel and expense software firm Navan shares sink by double-digits in first trade after $6 billion Nasdaq IPO

Published

3 hours ago

October 30, 2025

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Corporate travel and expense software firm Navan shares sink by double-digits in first trade after billion Nasdaq IPO

Corporate travel and expense management platform Navan fell by as much as 15% in its first trading day on the Nasdaq under the ticker symbol “NAVN” after its successful initial public offering.

The Navan IPO, which priced on Wednesday night, valued the business-to-business software vendor at $6.2 billion, raising $923 million and with shares settling at the midpoint of its deal range, $25 per share. The valuation was roughly $3 billion less than where private investors last valued Navan in 2022 in a $300 million round.

Launched by CEO Ariel Cohen and co-founder Ilan Twig in 2015, Navan set out to disrupt a business travel sector where incumbents relied on clunky legacy tools and fragmented workflows.

The Palo Alto-based company, formerly called TripActions, refers to itself as an “all-in-one super app” for corporate travel and expenses.

Customers include Geico, Zoom, Lyft, OpenAI, Unilever, Anthropic, Adobe, Christie’s, and Blue Origin.

“We really care about the traveler, the road warrior,” said CEO Ariel Cohen in a CNBC interview on IPO day.

Navan ranked No. 39 on this year’s CNBC Disruptor 50 list, and has made the list for two consecutive years.

Navan’s big day is also a huge win for venture investor Oren Zeev, who runs the rare one-person VC firm and at the IPO price was expected to have a stake in Navan worth over $1 billion, having first invested in the founders in 2013, two years before Navan came to life. “It’s a first for me,” Zeev told CNBC of having an early-stage investment result in a $1 billion payday. He has no office, no assistant, no one on payroll at all, but a portfolio of 50 companies (40 where he sits on the board, including Navan).

Cohen said Navan’s focus on business travel and expensing allows it to not only support the largest companies in the market but companies with as few as 10 employees. The idea, regardless of size, is that any companies with travelers can make sure “they are not wasting their time,” he said in his “Squawk Box” interview.

According to Cohen, it can take on average 45 minutes to book a complex business trip using traditional methods, but with Navan the process has been whittled down to seven minutes, and has led to 15% savings for customers.

It has also been pushing further into AI, with a virtual assistant named Ava handling approximately 50% of user interactions, and a proprietary AI framework called Navan Cognition supporting its platform, as well as proprietary cloud infrastructure.

“You are always one click away from Ava our chatbot to fix a flight, connect to a new hotel … whatever you need,” Cohen said.

Credit card swipes, corporate calendar items, and photos snapped on a phone of receipts can all go straight into AI analysis.

With Ava handling 50% of customer discussions, Cohen says the era of long hold times with travel agencies are a thing of the past, whether it is a natural disaster or the recent airport delays and closures that creates travel headaches.

“You don’t have to wait with us. She will take care of it,” he said.

Navan does have a lot of competitors, from niche players like Expensify to enterprise software heavyweights like Oracle and SAP.

Expensify stock has cratered since its 2021 IPO, down to under $2 per share after its $27 IPO price.

Cohen says when it comes to the competition, Navan believes it can separate itself from the pack with its focus on the traveler. No one likes to deal with expense reports or spend hours on the phone with travel agents, but “that’s what we do,” he said. “We know how to support you really fast and we know there is an interruption and we are trying to understand your journey as a traveler,” he added.

Navan reported trailing 12-month revenue of $613 million (up 32%) across over 10,000 customers, and gross bookings of $7.6 billion (up 34%), according to its S-1 filing. For the July quarter, Navan recorded a $38.6 million net loss on $172 million in revenue, which was up about 29% year over year, but fell short of its previous timeline for profitability.

The IPO market has bounced back to life in 2025, fueled by a mix of hot AI and crypto names and more mature tech companies that grew in the past decade of Silicon Valley startup funding, such as Coreweave, Circle, Figma and Klarna (Navan was founded in 2015).

There have been 182 IPOs priced this year, an increase of 42.2% from last year, according to IPO tracker Renaissance Capital, with total deal proceeds of $33.3 billion up just under 17% from last year.

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Amazon earnings: Cloud growth, holiday outlook and layoffs in focus

Published

4 hours ago

October 30, 2025

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Amazon earnings: Cloud growth, holiday outlook and layoffs in focus

What to expect from Amazon's earnings report as AWS faces pressure from rivals

Amazon is slated to post results for the third quarter after the closing bell Thursday.

Here’s what analysts polled by LSEG are looking for:

Earnings per share: $1.57
Revenue: $177.8 billion

Wall Street is also looking at other key revenue numbers:

Amazon Web Services: $32.42 billion expected
Advertising: $17.34 billion expected

AWS growth will be a major focus for investors once again, as the company faces intensifying pressure from cloud competitors Google and Microsoft, which also reported quarterly results this week.

Revenue at AWS is projected to expand 18.1% year over year, which is about the same growth rate as the second quarter. Google’s cloud revenue accelerated 34% during the third quarter, while Microsoft Azure recorded growth of 40%.

AWS stumbled last week during an extended outage that lasted more than 15 hours, taking down numerous websites as a result. Microsoft experienced outages in its Azure cloud and 365 services on Wednesday, hours before its scheduled earnings release.

The Amazon unit is also battling the perception that it’s missing out on a flurry of highly lucrative artificial intelligence deals for cloud services.

Anthropic and Google deepened their cloud partnership last week in a deal worth tens of billions of dollars, while Meta has inked hefty cloud deals with Google and Oracle in recent months.

Amazon on Wednesday opened its $11 billion AI data center called Project Rainier, which was first announced last December and is intended to train and run models from Claude chatbot creator Anthropic.

Amazon, which has invested $8 billion in Anthropic, said the startup will use 1 million of its custom Trainium2 chips by the end of 2025.

During last quarter’s earnings conference call, investors grilled Amazon CEO Andy Jassy on AWS growth and AI competition.

Jassy reiterated AWS has a “pretty significant” leadership position in cloud market share, while noting that it’s still “early” days in the AI industry that remains “very top heavy” with a “small number of very large frontier models.”

Apple reports fourth quarter earnings after the bell

Published

4 hours ago

October 30, 2025

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Apple reports fourth quarter earnings after the bell

FILE PHOTO: Formula One F1 – United States Grand Prix – Circuit of the Americas, Austin, Texas, U.S. – October 23, 2022 Tim Cook waves the chequered flag to the race winner Red Bull’s Max Verstappen.

Mike Segar | Reuters

Apple reports fiscal fourth quarter earnings on Thursday after the bell.

The fourth quarter, which runs through the end of September, is the first quarter that includes a little more than a week of sales of the new iPhone 17 models.

Analysts have said that early signs are pointing to improved demand for the iPhone 17 models, especially the entry-level and Pro models. Investors will be looking for any color from CEO Tim Cook and CFO Kevan Parekh on the demand they’re seeing for the new devices.

Analysts polled by FactSet expect Apple’s fiscal 2025 to be the first year of iPhone sales growth since 2022.

Apple has also been negatively affected by Trump administration tariffs, although the company has gotten praise from President Donald Trump over its plan to spend $600 billion in the U.S. and boost American semiconductor manufacturing. Apple also announced last week that it was shipping artificial intelligence servers from a factory in Houston.

In July, Apple said it could incur $1.1 billion in tariff costs. Investors will be watching to see if its actual costs came in under its forecast, as well as what tariff costs it sees in the current quarter.

Some investors want to see Apple step up its level of capital expenditure and AI spending. Apple has largely sat out the data center and AI chip investment boom that other large tech companies are spending tens of billions on.

Last quarter, Cook said that it was “significantly” growing its investments in the technology. That will likely show up in the company’s capital expenditures, but commentary from Cook may provide insight into the company’s AI strategy.

Cook will also likely praise the company’s five-year deal with F1 to broadcast its races in the U.S. on Apple TV, the latest development in the company’s sports and media strategy.

Expectations remain high for Cook and Apple. In the June quarter, Apple reported 10% year-over-year revenue growth. For the September quarter, analysts polled by LSEG are expecting 7.7% sales growth.

Here’s what Wall Street is expecting, per LSEG estimates: