Asian Stocks Fall as Meta and Tesla Split on Spend

Asian stocks fell on Thursday after Meta raised its AI budget and Tesla cut its own. Chipmakers that supply both trades took the hit, and oil added a second shock from Saudi Arabia.

The split landed in after-hours reports on Wednesday, then travelled into the Asia open. Seoul gave back most of Wednesday’s bounce. Hong Kong, already lower the day before, slid again. Brent climbed back through $110 a barrel after new strikes on a Saudi Aramco field and King Fahd International Airport in Dammam.

Korea and Japan Give Back Wednesday’s Gains

By the Tokyo lunch break the Nikkei 225 was at 63,917.43, down 1.1 percent from Wednesday’s close of 64,621.24. The Hang Seng Index was at 23,076.12, down 2.4 percent. Shanghai’s Composite was at 3,674.33, down 1.0 percent. West Texas Intermediate was up 1.2 percent at $98.29 a barrel. Brent was up 1.3 percent at $110.28.

THURSDAY MORNING IN ASIA

Seoul’s Kospi had jumped 3.29 percent on Wednesday to 5,735.66 after a 3.73 percent drop on Tuesday to 5,552.74, its weakest close since April. By 11:20 a.m. on Thursday it was at 5,605.54, down 129.12 points, or 2.25 percent, giving back most of that rebound. The won was at 1,324 per dollar, up 2 from the prior close. Wall Street had finished Wednesday higher, with the Dow up 0.69 percent, the S&P 500 up 0.58 percent and the Nasdaq up 1.05 percent, before Meta and Tesla reported.

Sydney, Singapore, Taipei, Wellington, Manila and Jakarta were also lower. The selling was not a clean dump of every Asian risk asset. Banks and much of Taiwan held up better than the memory and equipment names tied to the AI build, which is the slice of the region that still trades as a leveraged bet on American capex.

Meta Raises the Floor and Tesla Cuts It

The two American reports pointed in opposite directions on the only number Asia’s chip stocks now price: how much the buyers of AI hardware will spend, and who pays for it. Meta lifted the bottom of its 2026 capital range by $5 billion. Tesla cut its 2026 capital plan by $5 billion. Both moves unnerved the same complex.

Meta’s Ad Engine Funded a Cash Drain

Meta said third-quarter revenue was $64.60 billion, up 26 percent from $51.24 billion a year earlier. Daily active people across its apps averaged 3.64 billion in September, up 3 percent. Ad impressions rose 10 percent and the average price per ad rose 14 percent. Diluted earnings were $3.83 a share, up from $1.05.

The profit line is messier than the ads. Operating income fell 37 percent to $12.99 billion after a $9.89 billion charge tied to an agreement with 52 U.S. state attorneys general on teen mental health, a pact that provides for payments of up to about $18.59 billion. Strip out that charge and operating income would have been $22.88 billion and earnings $7.40 a share. Costs and expenses still jumped 68 percent to $51.61 billion. Headcount was 66,775, down 15 percent from a year earlier.

Capital spending, including principal payments on finance leases, was $34.91 billion in the quarter. Operating cash flow was $32.79 billion, so free cash flow was negative $2.12 billion. Cash, cash equivalents and marketable securities were $82.45 billion. Meta then narrowed 2026 capital spending to $135-145 billion from a prior range of $130-145 billion, raising the floor and leaving the ceiling in place. Fourth-quarter revenue is seen at $73-76 billion. Full-year expenses were raised to $175-179 billion to include the legal charge.

The company also said its board had approved a new class of non-voting Class C common stock, expected to take effect in January 2027, with a one-for-one stock dividend that will act like a two-for-one split. The filing says the new class is meant to help finance growth, pay employees, fund deals and keep Mark Zuckerberg, Meta’s founder and chief executive, in control. That is the shareholder-dilution tool sitting under the AI budget.

Meta’s numbers reinforce the AI investment cycle, but funding is becoming an increasingly important part of the conversation. Investors will reward growth and monetisation, yet they’re also becoming more sensitive to how the next leg of investment is financed and what it means for existing shareholders.

Chris Weston, head of research, Pepperstone

Zuckerberg said the company had hit “major milestones this quarter toward delivering personal superintelligence for everyone,” pointing to Muse and Muse Wonder, and that “our investments are paying off, the core business is strong.” The ad engine is still throwing off cash. The build ate all of it in the quarter, and then some.

Tesla’s Cash Came From Spending Less

Tesla reported revenue of $28.05 billion, roughly flat on a year earlier. Non-GAAP earnings were $0.48 a share, above the $0.45 forecast and down from $0.50 a year earlier. GAAP net income fell 43 percent to $787 million. Operating income dropped 56 percent to $718 million, a 2.6 percent margin, as operating expenses rose 39 percent to $4.78 billion and research and development jumped 69 percent to $2.76 billion.

Automotive gross margin excluding regulatory credits was 18.1 percent. Total gross margin was 19.6 percent, up from 18.0 percent a year earlier and 16.8 percent in the second quarter. Credits shrank 73 percent to $113 million. delivered 486,532 vehicles in the quarter against production of 464,391, and the company said it ended the period with the largest passenger-vehicle backlog in four years. Energy storage deployments rose 10 percent to 13.7 gigawatt-hours even as that segment’s revenue fell 16 percent to $2.88 billion.

Capital spending was $4.73 billion, more than double the $2.25 billion of a year earlier and down from $5.79 billion in the second quarter. Free cash flow was $1.53 billion, against $3.99 billion a year earlier, a $1.09 billion cash burn in the second quarter, and a $4.92 billion cash burn that analysts had modeled. Cash and investments were $45.4 billion. Through nine months Tesla has spent $13.01 billion of a plan it has now cut.

The company said it was revising 2026 capital spending to about $20 billion from more than $25 billion, “as a result of managing our capital deployment efficiently,” and that it plans to fund the outlay mainly from operating cash flow. It also said it had secured capacity to borrow up to $30 billion. Vaibhav Taneja, Tesla’s chief financial officer, tied the lower figure to tighter deployment. Elon Musk, Tesla’s chief executive, said on the call that capital spending was “ending up being a little lower than we anticipated,” would “start to become more meaningful next year,” and would be “noticeable in the tens of billions in ’28.”

Tesla’s third-quarter update is the document those figures sit in. Shares firmed in late New York trading after the print, then slipped. The cash generation that looked like a beat came largely from investing less than the old plan implied, which is a hard sell to investors who had priced Tesla as an AI and robotics spender and to the Asian suppliers who need that spend to land on their order books.

SpaceX’s Profit Did Not Travel Overnight

Two nights earlier, SpaceX had given the AI complex the bounce it wanted. In its first quarterly report since listing in June, the company posted revenue of $14.6 billion, up 161 percent from $5.6 billion, net income of $4.4 billion against a $1.1 billion loss a year earlier, and adjusted EBITDA of $8.8 billion, up 306 percent. Shares jumped in extended trading on Tuesday and helped lift Wednesday’s U.S. close. By Thursday morning in Asia that support was gone.

Q3 2026 highlights:
– Delivered revenue of $14.6 billion, up 161% year-over-year

– Successfully launched our first revenue-generating Starship mission, delivering 26 Starlink V3 satellites to our broadband constellation, representing approximately 10x the downlink capacity added… pic.twitter.com/Qr94io6PiW

— SpaceX (@SpaceX) October 20, 2026

Super Intelligence, the AI segment, was $7.56 billion of that revenue, up from $813 million a year earlier, and for the first time larger than Connectivity. Starlink consumer subscribers reached 13.6 million. Nameplate compute stood at 1.7 gigawatts. SpaceX also spent $19.59 billion of capital in the quarter, almost as much as Tesla now plans to spend in the whole year, because the AI line is already a sales engine rather than a promise. Bret Johnsen, SpaceX’s chief financial officer, said launch leadership, recurring Starlink revenue and the expansion of AI infrastructure were producing “meaningful operating leverage.”

HOW THE THREE SPENDERS COMPARED

That is the bind for the hardware chain. SpaceX can spend at this scale because cloud contracts, Grok and the Cursor deal are already on the income statement. Meta is still funding the build from ads and is now creating a new share class to keep doing it. Tesla is still funding robots and autonomy from cars, and just told the market the 2026 cheque is smaller. Asia sells all three reads as one trade.

Why Korean Chipmakers Sold Off

Samsung Electronics was down 3.36 percent and SK hynix down 3.63 percent by late morning in Seoul. Japan’s Kioxia and Tokyo Electron were off similar amounts, around 3 percent. In Hong Kong, Alibaba fell more than 5 percent and broke below HK$100, trading as low as about HK$98.80. Tencent and JD.com were also under pressure, and Lenovo dropped more than 5 percent. Hang Seng Tech was already down about 1.1 percent near the open and deepened from there.

THE NAMES THAT LED THE DECLINE

• Samsung Electronics: Down 3.36 percent by 11:20 a.m. in Seoul, giving back a large share of Wednesday’s rebound.
• SK hynix: Down 3.63 percent in the same window, still the Kospi’s swing name on any AI-capex scare.
• Alibaba: Down more than 5 percent, slipping through HK$100 to an intraday low near HK$98.80.
• Kioxia and Tokyo Electron: Off around 3 percent, in line with the Korean memory group.
• Tencent, JD.com and Lenovo: Hong Kong tech and hardware names that sold with the chip complex, Lenovo down more than 5 percent.

Those stocks do not report this week. They are the factories and memory lines that fill U.S. data-center orders, so they move when American buyers change the spend story, even when the change is a mixed pair. A separate print from Lam Research, the U.S. wafer-equipment supplier, did not help the mood. Lam posted $8.22 billion of sales and $2.20 of adjusted earnings per share, both slightly above forecasts, and guided the next quarter to $8.6 billion plus or minus $400 million, roughly in line with estimates. The shares still fell after the bell. Netflix, reporting on Tuesday, had already cut its 2026 advertising forecast to about $2.7 billion from $3 billion and posted 11.8 percent revenue growth, its slowest in three years, on $12.87 billion of sales.

Markets have spent months punishing the AI group for spending too much and, when a firm pulls back, for spending too little. Weston put that trap in one line: traders fret when firms ramp up and grow concerned when they pull back. Korean memory and Japanese equipment are the listed proxies for that argument. They rallied on SpaceX on Wednesday. They sold Meta’s bigger budget and Tesla’s smaller one on Thursday.

Brent Climbs Back Through $110

The tech tape was not the only bid in the session. Oil rose more than 1 percent after deadly attacks inside Saudi Arabia, a supply scare that hits Asian importers on the same morning their exporters of chips were already under pressure.

THE SAUDI ATTACKS BEHIND THE OIL MOVE

1. Wednesday night: An attack on King Fahd International Airport in Dammam killed one person and injured eight, the General Authority of Civil Aviation said, with material damage and flights diverted.
2. This week at an Aramco field: Debris from an intercepted drone killed two workers, nationals of Nepal and the Philippines, and injured two others, from Pakistan and India, the energy ministry said.
3. Thursday: The United States ordered non-essential embassy staff and family members to leave the kingdom as Houthi strikes continued.
4. Thursday morning: Brent was up 1.3 percent at $110.28 a barrel and WTI was up 1.2 percent at $98.29 on the Asia snapshot.

Yemen’s Houthis claimed the field and the Dammam airport among their targets. Higher crude feeds through to shipping, chemicals and the power bill on a data-center build that is already being second-guessed on funding. It is an old geopolitical premium stacked on a new capex argument, and Asia sits on both sides of it as a buyer of oil and a seller of the servers that oil now helps to run.

Microsoft, Amazon and Alphabet Report Next Week

The next tests are the other hyperscalers. Microsoft, Amazon and Alphabet report next week. Apple and Nvidia follow in November. Those four, with Meta, are the order book for Korean memory and Japanese equipment. If they copy Meta and lift the spend while talking about new paper, the funding debate stays live. If they copy Tesla and slow the cheque, the growth debate replaces it. Either print can sell the same Asian stocks, which is how this week already traded.

Thursday’s tape made that trap visible in a single session. SpaceX showed that AI revenue can already cover a $19.59 billion capex quarter. Meta showed that ads can still grow 26 percent and still not cover a $34.91 billion capex quarter without dipping into free cash flow and a new share class. Tesla showed that a car company can print $1.53 billion of free cash flow by spending less than the robotics story had implied. Seoul, Tokyo and Hong Kong sold the suppliers anyway, and oil did the rest.

Disclaimer: This article is news reporting and analysis of market moves and company results, and it is for information only. It is not investment advice, a recommendation to buy or sell any stock, index, currency or commodity, or a forecast of Thursday’s closes or of next week’s earnings. Readers should consult a licensed financial adviser or broker who can consider their own objectives and risk limits before making any investment decision. Index levels, oil prices, share moves and company figures reflect the statements and market prints cited here as of 22 October 2026 and can change as sessions close and further reports are issued.