Meta Raises 2026 Capex Outlook Amid AI Spending Surge, Shares Drop After Earnings

Meta Platforms has increased its full-year capital expenditure guidance for 2026, signaling continued aggressive investment in artificial intelligence infrastructure despite rising costs and market concerns. The company now expects capital expenditures to reach between $125 billion and $145 billion, up from its previous forecast of $115 billion to $135 billion. This revised outlook slightly exceeds Wall Street expectations of $125.26 billion, reflecting higher component prices and additional spending on data center expansion.

Following the announcement, Meta stock fell sharply, with Class A shares dropping more than 5% in after-hours trading. The decline comes as investors remain cautious about the long-term returns of massive AI investments, especially amid broader concerns about the growth trajectory of major tech players.

The Facebook, Instagram, and WhatsApp parent company continues to prioritize AI development, pouring billions into infrastructure to support its ambitions. Reports indicate that Meta is even extending the lifespan of some data center servers due to a global shortage of memory chips, highlighting ongoing supply chain challenges in the semiconductor industry.

Despite these concerns, Meta delivered strong first-quarter 2026 earnings results. The company reported earnings per share of $10.44 on revenue of $56.31 billion, significantly beating analyst expectations of $6.65 per share and $55.52 billion in revenue. However, a substantial portion of this earnings boost came from an $8.03 billion income tax benefit recognized during the quarter.

Looking ahead, Meta projects second-quarter 2026 revenue to fall between $58 billion and $61 billion, slightly below the consensus estimate of $59.6 billion at the midpoint. Full-year expenses are expected to range from $162 billion to $169 billion, closely aligning with market forecasts.

User growth remains steady, with Meta’s family of apps reaching 3.56 billion daily active users in March, a 4% year-over-year increase. However, the company noted a slight quarterly decline due to regional disruptions, including internet outages in Iran and restricted access to WhatsApp in Russia.

Meta also warned of ongoing regulatory challenges in the U.S. and Europe, particularly around youth safety and legal scrutiny, which could impact future financial performance. As hyperscaler spending is projected to exceed $700 billion this year, investors will be closely watching whether Meta’s heavy AI investments translate into sustainable growth.