Meta Platforms (NASDAQ: META) has raised its 2026 capital expenditure forecast, citing rising costs for artificial intelligence infrastructure and higher component prices. The update came alongside strong quarterly earnings, but it nevertheless weighed on investor sentiment.
Following the announcement, shares fell 5.29% in after-hours trading to around $633.75.
Higher CapEx Reflects Accelerated AI Buildout
The company now expects capital expenditures to range between $125 billion and $145 billion in 2026, up from its previous guidance of $115 billion to $135 billion. The revised outlook also sits slightly above Wall Street expectations of $125.26 billion, according to estimates compiled by Jefferies.
Meta attributed the increase primarily to higher hardware costs and the continued expansion of its data center footprint. These facilities remain central to its artificial intelligence strategy while also supporting core platforms including Facebook, WhatsApp, and Instagram.
At the same time, supply constraints are influencing the company’s infrastructure planning. According to The Wall Street Journal, Meta has extended the operational lifespan of some servers amid a shortage of memory chips that has tightened global supply. Internal documents described the situation as a significant hardware deficit, prompting adjustments to ensure sufficient capacity for AI workloads.
Rising Scrutiny Over AI Spending
These operational pressures come as the broader market grows more cautious about the scale of AI-related spending. Investors are increasingly questioning whether massive capital outlays by major technology firms will translate into sustainable long-term profits.
Sentiment was further dampened following a Wall Street Journal report suggesting OpenAI missed internal targets for user growth and revenue, reinforcing concerns about the near-term payoff from AI spending.
Consequently, attention has shifted to hyperscalers such as Meta, whose combined capital expenditures are expected to exceed $700 billion this year. The scale of this spending continues to fuel debate over efficiency and return on investment.
Upbeat Q1 Results Tempered by Forward Concerns
Despite these concerns, Meta Platforms (NASDAQ: META) reported robust first-quarter 2026 results. Earnings came in at $10.44 per share, well above analyst expectations of $6.65, while revenue reached $56.31 billion, also exceeding forecasts.
However, profitability was boosted by an $8.03 billion tax benefit, which contributed significantly to the earnings beat. Looking ahead, the company struck a more cautious tone.
Full-year expenses are projected to range between $162 billion and $169 billion, broadly in line with expectations. For the second quarter, Meta forecasts revenue of $58 billion to $61 billion, with the midpoint slightly below the $59.6 billion analyst consensus.
User Growth Remains Steady Amid Regional Disruptions
On the user side, Meta’s family of apps continued to expand, reaching 3.56 billion monthly active users in March, up 4% year over year.
However, growth moderated quarter over quarter due to external disruptions. The company attributed the decline to internet outages in Iran and WhatsApp restrictions in Russia.
Regulatory Risks Remain a Key Concern
Beyond operational and financial factors, regulatory pressures continue to weigh on Meta’s outlook. The company emphasized ongoing legal challenges in both the United States and the European Union.
In particular, scrutiny of youth-related issues remains a key concern. Meta also confirmed that additional trials are scheduled in the U.S. later this year. These proceedings could potentially have a material impact on its business and financial results, thereby adding another layer of uncertainty.
Leadership Emphasizes AI Vision
Amid these mixed signals, Meta’s leadership remains focused on long-term innovation. Chief Executive Mark Zuckerberg described the quarter as a significant milestone for the company.
He pointed to strong momentum across Meta’s apps and highlighted the launch of a new model from Meta Superintelligence Labs. Looking ahead, Zuckerberg reiterated the company’s ambition to bring advanced AI capabilities to billions of users worldwide, reinforcing its commitment to shaping the future of digital technology.
