Meta’s strategy hinges on a clear trade-off: its highly profitable ads business is funding an aggressive surge in capex, primarily for AI infrastructure — as explored in the economics of AI compute infrastructure — . The market is asking, "Is this working?”

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 — 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 · Normalized EPS: about $7.31