Meta Platforms (META) Stock Plunges 8% on Massive $145B AI Infrastructure Forecast

Key Takeaways

• Shares of META declined roughly 8% during extended trading hours following quarterly results
• First quarter earnings reached $10.44 per share with revenues totaling $56.3 billion, surpassing analyst projections
• Capital expenditure outlook for 2026 increased to a range of $125B–$145B from the prior $115B–$135B estimate, driven by elevated component pricing
• The platform’s daily active users increased 4% annually, reaching 3.56 billion
• The social media giant recently revealed workforce reductions affecting 8,000 employees, representing roughly 10% of total staff

Meta Platforms delivered impressive first-quarter results, yet Wall Street’s attention quickly shifted to the company’s escalating investment plans and their substantial financial implications.

The company’s quarterly earnings of $10.44 per share significantly exceeded analyst expectations of $8.15. Total revenue reached $56.3 billion, surpassing the Street’s $55.5 billion projection. However, excluding a one-time $8 billion tax advantage, adjusted earnings would have been $7.31 per share.

Despite the positive performance, META shares plummeted approximately 8% during after-hours trading following the announcement of an increased capital investment roadmap for 2026.

The technology giant now projects 2026 capital spending will range from $125 billion to $145 billion, representing an increase from the previously communicated $115 billion to $135 billion range. Management attributed this upward revision to rising costs for technological components and expanded data center infrastructure requirements.

Total operating expenses for the full 2026 fiscal year are anticipated to hold steady at $162 billion to $169 billion.

To put this in perspective, Meta’s complete 2025 fiscal year expenses totaled $117.7 billion, including capital expenditures of $72.2 billion — already representing a substantial increase from previous periods.

Management provided Q2 revenue guidance between $58 billion and $61 billion.

Meta Platforms, Inc., META

Massive Tech AI Investments Create Market Uncertainty

Meta’s earnings release coincided with reports from other technology titans including Alphabet, Microsoft, and Amazon. However, those three competitors demonstrated more tangible returns from their artificial intelligence ventures, helping their stock performance remain relatively stable.

The aggregate AI capital allocation from these four technology behemoths is projected to exceed $650 billion during the current year. This staggering investment level has created considerable market apprehension, with financial analysts questioning the timeline and certainty of adequate returns.

Forrester analyst Lee Sustar highlighted persistent concerns “about the sustainability of the AI boom,” emphasizing the substantial capital requirements against limited demonstrated financial benefits thus far.

User Engagement Rises Annually Despite Sequential Decline

Regarding platform engagement, Meta’s daily active people count hit 3.56 billion at the end of March, representing a 4% year-over-year increase.

This figure showed a modest decrease from the 3.58 billion reported in the fourth quarter, which the company explained resulted from internet connectivity issues in Iran and regulatory restrictions on WhatsApp services in Russia.

Advertising impressions throughout Meta’s application ecosystem climbed 19% compared to the previous year’s first quarter, while average advertising rates increased 12%. Both metrics demonstrated improvement relative to fourth-quarter growth trends.

Total employee count reached 77,986 as of the March quarter-end.

The previous week, Meta disclosed plans to eliminate 8,000 positions — approximately 10% of its employee base — alongside canceling 6,000 unfilled positions. Company leadership characterized these reductions as part of an ongoing efficiency initiative necessary to “offset the other investments we’re making.”

META concluded regular trading hours on April 29 at $669.12 per share, before declining to approximately $613 during pre-market activity following the earnings announcement.

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