Key Takeaways
- META shares declined approximately 8% during after-hours trading following quarterly results
- First quarter earnings per share reached $10.44 with revenue of $56.3 billion, surpassing analyst projections
- Capital expenditure outlook for 2026 increased to $125B–$145B from prior guidance of $115B–$135B, driven by elevated component pricing
- The company’s family of apps saw daily active people grow 4% annually to 3.56 billion
- The social media giant recently unveiled workforce reduction plans affecting approximately 8,000 employees, representing roughly 10% of staff
Meta Platforms delivered impressive first-quarter results, yet Wall Street’s attention quickly shifted to the company’s escalating artificial intelligence expenditure projections.
The technology giant reported earnings per share of $10.44, significantly exceeding analyst expectations of $8.15. Quarterly revenue reached $56.3 billion, surpassing the consensus forecast of $55.5 billion. However, removing an $8 billion one-time tax advantage from the calculation brings adjusted EPS down to $7.31.
Despite the solid performance, the positive results couldn’t shield the stock from a sell-off. META shares tumbled roughly 8% in extended trading following the announcement of increased capital spending projections for 2026.
The company now anticipates 2026 capital expenditures ranging from $125 billion to $145 billion, representing an increase from the previously communicated range of $115 billion to $135 billion. Management attributed this upward revision to rising costs for technology components and expanded data center infrastructure requirements.
Total operating expenses for the full year 2026 are projected to hold steady within a range of $162 billion to $169 billion.
To put these figures in perspective, Meta’s total costs for 2025 reached $117.7 billion, with capital spending alone hitting $72.2 billion — a substantial increase compared to previous fiscal years.
Management issued second-quarter revenue guidance between $58 billion and $61 billion.
Tech Giants’ AI Investment Surge Creates Market Uncertainty
Meta’s earnings report arrived alongside quarterly results from other technology leaders. Alphabet, Microsoft, and Amazon also released their financial performance during the same period. However, these three competitors demonstrated more tangible returns from their artificial intelligence initiatives, helping their stock valuations weather investor scrutiny more effectively.
Aggregate AI capital investments from these four technology powerhouses are projected to exceed $650 billion throughout this year. This staggering figure has generated considerable unease across financial markets, with industry observers questioning the timeline and probability of adequate returns matching these massive outlays.
Forrester analyst Lee Sustar highlighted persistent concerns “about the sustainability of the AI boom,” emphasizing the substantial financial commitments coupled with relatively modest visible returns to date.
User Base Expands Annually While Experiencing Minor Sequential Decline
Regarding audience metrics, Meta’s daily active people across its family of applications totaled 3.56 billion at the end of March, representing a 4% year-over-year increase.
This figure showed a modest sequential decrease from the 3.58 billion reported in the fourth quarter. The company explained this quarter-over-quarter dip as resulting from connectivity challenges in Iran and restrictions on WhatsApp access in Russia.
Advertising impressions across Meta’s portfolio of applications climbed 19% compared to the same period last year, while the average cost per advertisement rose 12%. Both metrics demonstrated acceleration relative to fourth-quarter growth trajectories.
Total employee count registered at 77,986 as of the quarter’s conclusion on March 31.
The previous week, Meta disclosed plans to eliminate 8,000 positions — approximately 10% of its total workforce — and cancel 6,000 unfilled job openings. Company leadership characterized these reductions as a continuation of operational efficiency initiatives necessary to “offset the other investments we’re making.”
Meta concluded regular market hours on April 29 at $669.12 per share, before sliding to approximately $613 during pre-market activity following the earnings announcement.
