META Stock Tumbles As Investors Try To Digest Bloated 2026 Capex Outlook

• Meta beats Q1 revenue and profit expectations.
• Q2 revenue guidance of $58-61 billion beats expectations of $55.8-61 billion.
• Meta raises full-year capex guidance to $135-145 billion.

Meta Platforms (META) share price dropped 6% after hours, as the company’s bloated capital expenditure guidance for 2026 offset optimism from strong second-quarter revenue guidance and Q1 revenue that beat expectations.

The owner of Facebook and Instagram announced that it would be raising capital expenditures for the year. The company’s forecasted capex range is now $135 billion at the midpoint, up from $125 billion previously, far exceeding analyst estimates of $124 billion.

Meta reported Q1 earnings of $10.44 per share, beating the analyst consensus of $6.82 per share.

The company is dealing with “higher component pricing” and additional data center costs, Chief Financial Officer Susan Li said in a statement. 

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

Zuckerberg has earlier indicated his intention to spend billions on AI infrastructure as the company looks to develop a full-stack in-house, from the AI models to the hardware required to run and deliver them. 

The firm has announced billion-dollar deals with Nvidia Corp., Advanced Micro Devices Inc., and Broadcom Inc. for chips and other hardware and is building several massive data centers to power its efforts. 

Meta reported $56.3 billion in Q1 sales, beating Wall Street’s estimate of $55.51 billion, according to data from Fiscal.ai. It estimated Q2 sales of $58 billion to $61 billion, roughly in line with estimates. 

Meta’s recent layoffs and its decision to freeze hiring in the near term were meant to offset these huge capex expenditures it plans to make to run its massive AI data centers. 

META Retail View

Retail sentiment on Stocktwits was ‘bullish’with ‘high’ message volumes. 

One user was astonished by the massive EPS beat. 
https://stocktwits.com/buck_7779/message/651814303

The stock has gained 1.4% year-to-date.