Meta Stock Overnight Decline Analysis: Antitrust Win vs. Earnings Headwinds

Meta Platforms (META) faced a dual event day on November 18, 2025: a favorable antitrust ruling and an after-hours earnings release. The U.S. District Court ruled Meta does not need to split off WhatsApp or Instagram [1][2], reducing long-term regulatory risk and driving a 1.03% gain in regular trading [0]. However, after the market closed, Meta’s Q3 2025 earnings report revealed a $15.93B non-cash tax charge and raised CAPEX guidance to $70-72B [3][4], leading to an overnight decline in after-hours trading [3]. This discrepancy highlights the separation between regulatory developments and quarterly financial performance.

1. Event Timing Impact
   : The antitrust ruling occurred during regular hours, while earnings were released post-market, creating divergent price reactions in the same day.
2. Non-Cash Charge Effect
   : The large non-cash tax charge distorted GAAP EPS, overshadowing strong operational results and adjusted EPS [5].
3. AI Investment Tradeoff
   : Meta’s increased CAPEX reflects AI infrastructure investments, but unlike peers (e.g., Microsoft), it lacks cloud revenue to offset these costs [5].

• Short-term earnings volatility from non-cash charges and CAPEX fluctuations [3].
• AI investment risk without complementary cloud revenue streams [5].
• Valuation pressure from margin concerns due to higher expenses [4].

• Reduced long-term regulatory risk from the antitrust victory [1][2].
• Potential for AI-driven growth to offset CAPEX increases over time [5].

• Antitrust Win
  : Judge ruled no split of WhatsApp/Instagram, reducing regulatory risk [1][2].
• Regular Trading
  : Meta stock closed up 1.03% at $597.69 [0].
• After-Hours Earnings
  : Drop (~6-12%) due to $15.93B non-cash tax charge and CAPEX guidance raise (to $70-72B) [3][4].
• Key Metrics
  : Adjusted EPS exceeded expectations, but GAAP EPS missed significantly [5].