Key Takeaways

• Stock takes a hit: Meta shares plunged as much as 8% in premarket trading after the company raised its capital expenditure outlook.
• Massive capex hike: 2026 capital spending guidance lifted to $125-$145 billion, up from the prior $115-$135 billion range.
• Q1 blowout earnings: Revenue hit $56.31 billion (vs. $55.52 billion expected), with EPS of $10.44 crushing the $6.65 forecast — boosted by an $8.03 billion tax benefit.
• Q2 outlook: Revenue guided at $58-$61 billion, with the midpoint just under the $59.6 billion consensus.
• Server supply crunch: Meta is extending the life of some data center servers amid a “significant server supply deficit” caused by a memory chip shortage.
• AI infrastructure tailwind: Hyperscaler capex is projected to top $700 billion this year.
• OpenAI shadow: The report follows reports that OpenAI missed user and revenue targets, sparking concerns about AI spending payoffs.
• Family of apps grows: Daily active users hit 3.56 billion in March, up 4% year-over-year — though Iran internet disruptions and Russian WhatsApp restrictions caused a slight quarterly dip.
• Zuckerberg’s vision: The CEO touted Meta Superintelligence Labs’ first model release, saying the company is “on track to deliver personal superintelligence to billions.”

Meta Platforms on Wednesday raised its full-year capital expenditure guidance to reflect expectations of higher component prices and additional costs tied to building out data centers. Shares in the company tumbled as much as 8% in premarket trading.

The Menlo Park, California-based tech giant guided for 2026 capital expenditures in the range of $125 billion to $145 billion, up from a previous forecast of $115 billion to $135 billion — and slightly above the Street expectation of $125.26 billion, as compiled by Jefferies.

“Meta continues to earn the right to invest as long as it delivers faster top line growth for longer NT and higher FCFs LT,” Truist Securities analyst Youssef Squali noted.

AI Spending Under the Microscope

Meta’s results land at a moment when spending plans on artificial intelligence are being scrutinized like never before. The parent of WhatsApp, Facebook, and Instagram has been aggressively pouring resources into its infrastructure, including billions of dollars in data center investments to underpin its AI ambitions.

The company hiked its capex plans partly to reflect anticipated higher component prices this year. Ahead of Meta’s report, the Wall Street Journal revealed that the tech heavyweight was extending the operational life of some of its data center servers amid a “significant server supply deficit” stemming from an ongoing shortage of memory chips, citing two internal memos it had reviewed.

Full-year expenses are still projected at $162 billion to $169 billion, compared with a Street estimate of $163.77 billion. Meanwhile, Q2 2026 revenue is expected to come in between $58 billion and $61 billion. The midpoint of that range fell just slightly below the consensus of $59.6 billion.

OpenAI’s Stumble Casts a Shadow

Meta’s quarterly results came just a day after the broader tech sector took a beating amid concerns around AI leader OpenAI’s growth trajectory. A Wall Street Journal report indicating that the ChatGPT developer had recently missed its own targets for new users and revenue — citing people familiar with the matter — weighed heavily on sentiment.

The report sparked concerns that the massive AI spending push by so-called hyperscalers such as Meta will ultimately deliver the promised returns. Hyperscaler capital expenditure is expected to exceed $700 billion this year alone.

Strong Quarterly Numbers Power Through

The Facebook and Instagram parent posted earnings of $10.44 per share on revenue of $56.31 billion in Q1 2026. Analysts had been expecting a profit of $6.65 per share on revenue of $55.52 billion.

“We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs. We’re on track to deliver personal superintelligence to billions of people,” CEO Mark Zuckerberg said in a statement.

Meta noted that its earnings per share were lifted by an $8.03 billion income tax benefit recognized during the quarter.

Users across the company’s family of apps climbed 4% year-on-year to 3.56 billion on average for March, although the figure dipped slightly on a quarter-on-quarter basis. Meta attributed the decline to internet disruptions in Iran and restricted WhatsApp access in Russia.