TLDR
- META stock dropped ~8% in after-hours trading after Q1 earnings
- Q1 EPS came in at $10.44 on revenue of $56.3 billion, beating Wall Street estimates
- 2026 capex forecast raised to $125B–$145B, up from $115B–$135B, due to higher component costs
- Daily active users across Meta’s platforms rose 4% year-over-year to 3.56 billion
- Meta recently announced plans to cut 8,000 workers, about 10% of its workforce
Meta Platforms posted a strong first quarter, but investors fixated on what comes next — and the price tag attached to it.
Q1 earnings per share came in at $10.44, well above Wall Street’s estimate of $8.15. Revenue hit $56.3 billion, topping the $55.5 billion consensus. Strip out an $8 billion one-time tax benefit, though, and EPS drops to $7.31.
The beat wasn’t enough. META stock fell around 8% in after-hours trading after the company raised its 2026 capital expenditure forecast.
Meta now expects 2026 capex to land between $125 billion and $145 billion, up from its previous range of $115 billion to $135 billion. The company cited higher component pricing and additional data center costs as the main drivers.
Overall full-year expenses for 2026 are expected to remain flat, in a range of $162 billion to $169 billion.
For context, Meta’s full-year 2025 costs came in at $117.7 billion, with capex reaching $72.2 billion — already up sharply from prior years.
Q2 revenue guidance was set at $58 billion to $61 billion.
AI Spending Across Big Tech Rattles Investors
Meta wasn’t alone in reporting this week. Alphabet, Microsoft, and Amazon all posted results around the same time. But those three companies showed clearer returns on their AI investments, which helped them hold up better with investors.
The combined AI spending from these four tech giants is expected to top $650 billion this year. That number has put markets on edge, with analysts questioning when — or whether — returns will justify the cost.
Lee Sustar of Forrester noted ongoing anxiety “about the sustainability of the AI boom,” pointing to high costs and so far limited visible payoff.
Users Up, But Growth Slows Quarter-Over-Quarter
On the user side, Meta’s daily active people metric reached 3.56 billion as of March, up 4% from a year ago.
That was a slight dip from 3.58 billion in Q4, which Meta attributed to internet disruptions in Iran and a WhatsApp restriction in Russia.
Ad impressions across Meta’s apps rose 19% year-over-year in Q1, while the average price per ad increased 12%. Both figures marked an acceleration compared to Q4 growth rates.
Headcount stood at 77,986 as of March 31.
Last week, Meta announced it would cut 8,000 employees — about 10% of its workforce — and eliminate 6,000 open roles. The company said the cuts were part of a continued efficiency push and needed to “offset the other investments we’re making.”
Meta closed regular trading on April 29 at $669.12, before dropping to around $613 in pre-market following the earnings release.
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