Metaβs strategy hinges on a clear trade-off: its highly profitable ads business is funding an aggressive surge in capex, primarily for AI infrastructure β as explored in the economics of AI compute infrastructure β . The market is asking, "Is this working?β
Before the structural read, the accounting correction that matters most.
Meta reported $26.8B in net income and $10.44 diluted EPS. Both figures are distorted. The quarter includes an $8.03B one-time income tax benefit β a partial reversal of the $15.93B charge absorbed in Q3 2025 when the One Big Beautiful Bill Act was enacted. Strip it out:
Normalized net income: around $18.7B Β· Normalized EPS: about $7.31
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Continue Reading: Meta Ads: The Machine That Over-Funds The AI Bet?
Metaβs strategy hinges on a clear trade-off: its highly profitable ads business is funding an aggressive surge in capex, primarily for AI infrastructure.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
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