Mark Zuckerberg’s company, Meta, set a record for quarterly earnings at its latest report. And yet the market gave the stock an absolute spanking.

Meta (Nasdaq: META) posted revenue of $64.6 billion, up 26% on a year ago. By the end of the week, the shares were down almost 13%.

Why would the market punish a record like that?

Well, it has form in recent times.

In fact, it’s almost becoming a predictable event where a major tech company, heavily involved in AI, reports record results and the market brutalizes it.

No one is immune. Nvidia, Micron, Oracle, Broadcom… whoever.

One of the culprits of this is the market fear of debt and capital expenditure (capex).

Meta also spent $34.91 billion on servers and data centers in three months, and free cash flow was negative $2.12 billion. They’re pumping resources into their AI buildout come hell or high water.

You see this play out most notably in the bond market. The cost of insuring Meta's debt (the yield) against default hit a record of about 1.19% about a week ago.

Chump change really, but enough of a concern that the market shook down the stock price.

However, to combat these rising yields, Meta decided to skip a round of bond sales (that everyone was expecting) and is doing a share sale instead. They’re starting with about $35 billion now and a $60 billion sale later.

Almost immediately the yields came down, and it was widely seen that skipping the bond sale was directly because of the debt fears.

This is important to understand because Meta calming the debt markets in this instance means the debt fears are wildly overblown.

Hot on the heels of Meta, Microsoft (Nasdaq: MSFT) and Alphabet (Nasdaq: GOOGL) will release their earnings Wednesday, and Amazon (Nasdaq: AMZN) will follow up with theirs on Thursday.

The expectation is they’ll all beat. I don’t think it takes a rocket scientist to figure that out. But the big question is will the stock prices finally rise on big earnings beats or do what they’ve been doing?

I expect all three to beat, and to lift spending again. But not just beat by a little, but to annihilate previous earnings records. And to spend up so big on capex that it’ll make the ground shake under the feet of the AI bears.

I also think they'll go out of their way to show bond buyers they won't flood the market with debt.

Microsoft hasn't sold a single bond to pay for its AI build yet. Amazon is the one to watch, as the cost of insuring its debt is up 129% this year. They may well follow in Meta’s footsteps and do a share sale instead and ramp up capex even further.

Free cash flow (FCF) will likely stay deep in the red, which is fine when you consider the scale of their infrastructure build-out. Bears will say it’s overspend, but if you want to know how wrong they are just flip back to what Meta reported.

Meta's filing on Monday said

“Meta generated $97 billion of operating cash flow in the first three quarters of 2026 and had approximately $82 billion of cash, cash equivalents, and marketable securities at the end of the third quarter.”

It's not a cash problem, it's a choice to pour every dollar (and then some) back into chips and AI factories.

Yields might rise, the debt fear might linger, but let’s be honest here, default isn't on the table for any of them. They could all take FCF positive if they wanted, still build out their AI factories (just at a slower speed to competition), and still make insane profits if things got shaky.

But they’re going deep and hard here because they can and that’s the point the market misses. This choice to spend is not without payback, in fact it’s widely seen that outlay on compute pays back in around nine months now… not even a full year to pay back the spend.

And for that you just look at the revenues that Anthropic reported on every dollar of compute they spend.

And if you want even more proof as to how profitable the AI build-out is, then tune in tomorrow as we look at SK Hynix’s earnings (and some commentary on Microsoft and Google) because SK, one of the world’s largest memory makers absolutely blew the roof off.

Point is, this earnings season isn’t going to be like the previous ones.

This one is going to make the bears look ridiculous, and the market realize there’s so much runway to play out here and growth on the table that not owning these companies at this stage of the AI build-out will look like the worst decision in history.

I'd be buying where and however much you can afford.

Of course, none of it is without risk, we’ve seen how these prices can swing 5%, 10% in a day, 13% in a week when you look at Meta.

So, you’d better be ready for volatility. But long-run viewing, the AI build-out will become ridiculously profitable for the big hyperscalers, and hugely profitable for the stockholders in them all.

The market is ready to resume the way it should be: a company dominates earnings and the stock price goes up.

I think it starts now.

More soon,

Lewis Maguire