Meta Platforms (NASDAQ:META) reported a 58% year-over-year increase in stock-based compensation for the second quarter, reaching $7.66 billion, which equated to 12.6% of its revenue. This marks the highest apparent equity-based compensation expense among the four leading U.S. AI platforms, according to company filings reviewed on August 5, 2026.
The surge in compensation comes as major tech firms compete fiercely for AI researchers. The gap is stark: Meta's stock compensation as a percentage of revenue is nearly double Alphabet's (NASDAQ:GOOGL) 6.7% and roughly four times that of Microsoft (NASDAQ:MSFT) or Amazon (NASDAQ:AMZN), which both stood at about 3%.
Turnover among researchers is now affecting both operational expenses and the reliability of reported earnings. Reuters confirmed that John Jumper left Google DeepMind for Anthropic, while Ruoming Pang moved from Meta to OpenAI after only about seven months at Meta. Axios also reported a senior exit from Thinking Machines, though details remained unconfirmed.
Financial Impact of AI Talent Wars
Meta's stock-based compensation reached $7.66 billion, up 58.4% year-over-year, on revenue of $60.80 billion. In comparison, Alphabet reported $8.00 billion in stock compensation (up 33.3%) on $119.80 billion revenue, Microsoft $3.12 billion (up 1.6%) on $90.01 billion, and Amazon $6.04 billion (down 7.6%) on $200.60 billion. These figures cover total company compensation, not just AI personnel, but serve as a proxy for AI payroll intensity.
Meta allocated $6.76 billion—approximately 89% of its RSU expenditure—to research and development, which increased 67% due to higher compensation, infrastructure investments, and spending on third-party AI tokens.
Anthropic's Influence on Earnings
Amazon posted non-operating pre-tax income of $53.4 billion, driven chiefly by its stake in Anthropic. This gain was nearly double its $27.5 billion operating profit. Microsoft, in comparison, recorded a $3.2 billion gain from its Anthropic investment, reported under quarterly special items. These entries add complexity, as talent retention at private labs like Anthropic affects not just reported earnings but also strategic value.
Cash Flow and Capital Expenditure Divergence
Microsoft reported the highest cash conversion, generating quarterly free cash flow of $19.64 billion and posting an operating margin of 45.1%. CEO Satya Nadella said customers are able to “turn tokens into business results.”
Meta, however, achieved much lower conversions, with free cash flow of just $784 million following capital expenditures of $31.08 billion. Josh Gilbert, eToro's lead analyst for Asia-Pacific, commented that Meta is “spending like a hyperscaler without a hyperscaler’s business model.”
Alphabet reported a 32% increase in R&D costs, partly due to AI talent salaries and higher depreciation, while its operating margin held steady at 34% and free cash flow was negative $5.9 billion. Amazon's AWS revenue grew 37%, its fastest in 18 quarters, but free cash flow was negative $7.69 billion.
Analyst Sentiment and Market Reaction
Broker sentiment remains positive, though Meta's price target was cut. Daiwa Securities lowered Meta's target by 13% to $687 but kept a Buy rating. Daiwa also raised Microsoft's target by 4% to $595, and President Capital Management increased Amazon's target by nearly 10% to $379. As of 12:15 p.m. EDT, Meta shares slipped 0.8% to $583.19, Alphabet fell 0.9%, Microsoft retreated 0.8%, and Amazon slid 1.5%.
Risks remain: companywide stock compensation is only a proxy for AI pay, departures may be isolated, and forfeited awards could lower future expenses. Robust advertising and cloud performance might offset higher labor and infrastructure costs. The Amodei allegation is still based on anonymous sources.
