Shares of Meta Platforms jumped 5.7% to $703.44 Monday morning after the company unveiled what it called the first petabit-capacity transoceanic subsea cable, adding to a broader rally in tech and AI stocks. The announcement raises a sharp question for shareholders: at what point does an advertising company's infrastructure bill start to dwarf its ability to generate returns?
The Cable Doubles Existing Capacity — and the Spending Commitment
The new cable will carry twice the capacity of today's best-in-class transoceanic systems, delivering 1 petabit per second — the single largest generational increase of any transoceanic subsea cable.
It will be the first to deploy multi-core fiber technology at scale, doubling capacity per fiber without a proportional increase in power or physical infrastructure. This arrives atop Meta's Project Waterworth, a 50,000-kilometer, five-continent system , and its Aurora transatlantic cable targeting 497 terabits per second by 2028. Three massive cables in rapid succession signal a company building its own private internet backbone.
$135–145 Billion in Capital Spending Leaves Little Room for Error
Meta's 2026 capital expenditure guidance now stands at $135–145 billion — roughly double the $72.2 billion it spent in 2025 and nearly four times its 2024 outlay of $39.2 billion.
In Q2 alone, quarterly capex of $31.1 billion consumed roughly 98% of operating cash flow, pushing free cash flow near breakeven. Subsea cables are relatively modest line items compared to data centers, but they compound an already historic spending surge. Revenue is growing — up 28% year-over-year in Q2 to $60.8 billion — but earnings missed expectations, and the stock fell after each of the past two earnings reports.
Owning the Pipes Protects Meta's Ad Business — and Its AI Ambitions
Meta makes more money outside North America than in its home market; having priority on dedicated subsea cabling helps ensure quality of service on that traffic. As AI models demand ever-larger data transfers between continents, owning the physical connections reduces dependency on telecoms and rivals like Google, which along with Amazon, Microsoft, and others contributed to more than 60 subsea cables by the end of 2024.
A 2029 Payoff Date Asks Investors to Be Patient
Built with Japan's NEC and Sumitomo Electric, with French telecom Orange handling the European landing , the cable won't come online until 2029. That three-year wait means today's rally is pricing in future strategic value — not near-term revenue. For a stock that has already shed more than 5% on capex-related selloffs this year, the market is making a bet that owning the world's fastest internet plumbing is worth the bill.