MENLO PARK, California, May 3, 2026, 06:01 PDT
Meta Platforms’ ambitious $145 billion AI infrastructure budget for this year is now in the spotlight, putting Mark Zuckerberg under fresh scrutiny. Shares of the Facebook parent slumped almost 9% on Thursday, with Friday’s close at $608.75, off another 0.5%.
Meta’s growth isn’t in doubt. What’s up in the air is if investors are willing to bankroll a swelling AI tab, with Reality Labs still deep in the red and daily user numbers slipping from the prior period across its app portfolio.
Unlike Alphabet, Microsoft, and Amazon, which have cloud-computing growth as a straightforward result of their AI investments, Meta stands apart. Its returns ride on improved ad targeting and potential gains from future consumer AI offerings and business agents—a narrative that’s not as simple for investors to latch onto.
Meta’s first-quarter revenue climbed 33% to $56.31 billion, with net income landing at $26.77 billion. The company posted earnings of $10.44 a share, a figure that includes an $8.03 billion tax benefit—without it, diluted EPS would have dropped by $3.13, according to Meta.
Meta bumped up its 2026 capital expenditure outlook to $125 billion-$145 billion, raising the target from the earlier $115 billion-$135 billion estimate. The company cited pricier components and extra data-center expenses as reasons behind the revision.
Meta reported its family daily active people averaged 3.56 billion in March, reflecting a 4% rise from a year ago. The company pointed to internet outages in Iran and WhatsApp blocks in Russia as reasons for a sequential dip from the previous quarter. Users are counted if they open any Meta app—Facebook, Instagram, WhatsApp or Messenger—at least once a day.
Reality Labs fueled jitters after recording $402 million in revenue but racking up a $4.03 billion operating loss for the quarter. Over in Meta’s main Family of Apps segment, operating income came in at $26.9 billion.
Zuckerberg wants investors to move beyond immediate expenses. He claimed Meta is “on track to deliver personal superintelligence to billions of people,” assuring analysts he views AI as a tool to “amplify” user abilities, not as a substitute for humans. Meta Investor
Meta’s Chief Financial Officer Susan Li didn’t mince words on the cost jump. “We’ve continued to underestimate our compute needs,” she said. Li pointed out that more computing muscle now sits at the core of both product quality and Meta’s internal operations. Q4 Capital
Meta’s push into debt markets has intensified. The company just sold $25 billion in investment-grade bonds, according to Reuters, following an uptick in its AI spending plans. S&P Global maintained a stable outlook, but flagged that Meta’s AI outlays are beginning to weigh on some credit metrics.
There’s still faith from some corners in Meta’s fundamentals. Matt Britzman, senior equity analyst at Hargreaves Lansdown, called the company’s “core business” one that’s “firing on all cylinders.” But he flagged the spending plan as pushing Meta up to the higher end of the tech risk spectrum. Hargreaves Lansdown
Not everyone was as generous. Gil Luria, managing director at D.A. Davidson, said Meta’s results “failed to impress investors,” especially in light of Google’s stronger numbers. He flagged the higher spending and noted operating expenses hadn’t gone down to offset it. MarketScreener
But it’s not only about cost. Meta flagged ongoing legal and regulatory hurdles in the U.S. and Europe, with youth safety under the microscope, and cautioned investors that upcoming U.S. court dates might trigger a significant loss. Forrester analyst J.P. Gownder, quoted by AP, described Big Tech’s AI data-center strategy as “a massive gamble.” AP News
For the moment, Meta’s ad business is covering the costs—ad impressions jumped 19%, and the average price per ad climbed another 12%. Free cash flow clocked in at $12.39 billion for the quarter. But the bigger hurdle is ahead: investors are after evidence that AI will drive revenue and engagement growth at a pace that outstrips Meta’s rising expenses.
