Mark Zuckerberg’s net worth plunged by roughly $25 billion on Thursday after Meta Platforms Inc. shares suffered their steepest one-day decline in more than two years. The rout — triggered by weaker-than-expected revenue guidance and rising expense forecasts — briefly erased more than $180 billion from Meta’s market capitalization, underscoring how sensitive Big Tech valuations remain to growth expectations and cost pressures.
According to the Bloomberg Billionaires Index, Zuckerberg’s personal fortune now stands near $155 billion, down from about $180 billion before the sell-off. The drop pushed him to fifth place globally, behind Elon Musk, Jeff Bezos, Bernard Arnault, and Larry Ellison. Meta shares closed down 13.8 %, their largest single-day percentage decline since February 2022.
Revenue Miss and Spending Shock
Meta’s third-quarter results beat earnings estimates but alarmed investors with softer revenue guidance for the fourth quarter, signaling decelerating ad demand amid tighter corporate budgets. The company also projected higher infrastructure and AI-related spending, raising total 2025 expenses to as much as $120 billion, compared with about $96 billion expected this year.
The guidance overshadowed Meta’s otherwise strong metrics: daily active users reached 3.3 billion across its family of apps, and advertising impressions rose 20 % year-on-year. Analysts said the stock reaction reflected valuation compression rather than a structural collapse in fundamentals.
“Meta is still growing, but at this valuation the market demands perfection,” said Dan Ives, analyst at Wedbush Securities. “Any hint of margin pressure translates instantly into billions in lost market cap.”
Valuation Impact and Sector Context
Before the sell-off, Meta traded at about 28 times forward earnings, above its five-year average of 23× and not far from the 30× threshold that historically signals stretched valuations across U.S. equities. The drop realigned the multiple closer to peers such as Alphabet and Amazon.
The rout rippled across the Nasdaq 100, which fell 1.9 %, with other megacap tech stocks sliding in sympathy. Nvidia, Alphabet, and Apple each lost between 2 % and 4 %. Despite the pullback, the broader index remains up more than 25 % year-to-date, leaving investors debating whether the episode marks a healthy correction or the beginning of multiple contraction in high-growth technology names.
“This is a valuation reset, not a fundamental collapse,” said Victoria Greene, CIO at G Squared Private Wealth. “The market had priced in perpetual AI growth, but capex guidance reminded investors that innovation comes with costs.”
Investor Sentiment and Market Reaction
Trading volume in Meta options surged to record levels, with put-call ratios spiking as hedge funds and retail traders positioned for additional volatility. Short interest in Meta rose to 1.7 % of float — modest but the highest in six months. Meanwhile, some institutional desks reported opportunistic buying by long-only funds, suggesting confidence that the pullback might prove temporary.
Still, strategists warn that elevated interest rates and slowing global ad spending could cap near-term upside. The Federal Reserve’s policy rate, now at 5.25 % – 5.50 %, keeps discount rates high, compressing valuation models across tech. With 10-year U.S. Treasury yields hovering near 4.5 %, equities priced above 25× earnings face an increasingly demanding risk-reward equation.
Zuckerberg’s Long Game
Despite the sharp paper loss, Zuckerberg remains Meta’s largest shareholder, holding roughly 13 % of outstanding stock. He has continued to champion heavy investment in artificial intelligence, augmented reality, and the metaverse, arguing that such spending is necessary to maintain long-term competitiveness.
“Meta’s transformation into an AI-first company is expensive,” said Gene Munster of Deepwater Asset Management. “But these investments are foundational; investors have to separate short-term margin pain from long-term dominance.”
Takeaway for Investors
The Meta episode underscores the fragility of Big Tech valuations in a high-rate environment. While earnings growth and AI optimism remain strong, stretched multiples leave little room for error. Institutional investors are likely to use the dip to rebalance exposure, rotating toward companies with consistent cash flow and lower forward multiples.
For Zuckerberg, the hit is significant but far from existential. For the market, it’s another reminder that even trillion-dollar giants are not immune to gravity.
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