Why Meta Stock Dropped -- Then Bounced Back

Meta Platforms locked in a multi-year supply agreement with Sandisk for NAND flash memory to support its AI infrastructure buildout, reaffirming the company's $145 billion AI spending plan for 2024. The deal sent supplier stocks higher—Sandisk and Broadcom both gained—but Meta shares initially dropped 4% before recovering during the session.

The intraday volatility reflects growing investor concern over Meta's capital intensity. The company is on track to spend more cash on AI infrastructure than it generates from operations this year, a reversal from its historically strong free cash flow profile. The $145 billion figure represents one of the largest single-year capital commitments in tech sector history.

Supplier beneficiaries like Broadcom rallied on confirmation of sustained demand for AI components, while Meta's recovery from the morning dip suggests the market is weighing near-term cash burn against the strategic necessity of AI infrastructure investment.