Key Takeaways
- META shares declined approximately 8% during after-hours trading following the quarterly report
- First-quarter earnings per share reached $10.44 with revenue of $56.3 billion, surpassing analyst expectations
- Capital expenditure outlook for 2026 increased to a range of $125B–$145B from the prior estimate of $115B–$135B due to elevated component pricing
- The platform’s daily active user base grew 4% annually to reach 3.56 billion people
- The social media giant recently revealed workforce reduction plans affecting 8,000 employees, representing approximately 10% of staff
Meta Platforms delivered impressive first-quarter results, yet Wall Street’s attention quickly shifted to the company’s future spending trajectory and its substantial financial implications.
The social media and technology conglomerate reported earnings per share of $10.44 for the first quarter, significantly exceeding analyst projections of $8.15. Quarterly revenue reached $56.3 billion, surpassing the consensus forecast of $55.5 billion. However, when accounting for an $8 billion one-time tax benefit, adjusted EPS stands at $7.31.
Despite the positive performance, the earnings beat failed to satisfy investors. META stock declined approximately 8% during after-hours trading following the announcement of an elevated capital expenditure forecast for 2026.
The company now projects 2026 capital spending to fall within a range of $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 component costs and expanded data center infrastructure requirements.
Meta indicated that total operating expenses for 2026 should remain relatively stable, projected at $162 billion to $169 billion.
To put these figures in perspective, Meta’s total 2025 expenses reached $117.7 billion, with capital expenditures alone hitting $72.2 billion — already marking a substantial year-over-year increase.
The company provided second-quarter revenue guidance of $58 billion to $61 billion.
Big Tech’s AI Investment Wave Creates Market Uncertainty
Meta’s earnings release coincided with reports from other technology leaders including Alphabet, Microsoft, and Amazon. However, these competitors demonstrated more tangible returns on their artificial intelligence investments, resulting in more favorable market reactions.
The collective AI infrastructure spending from these four technology powerhouses is projected to exceed $650 billion during the current year. This unprecedented spending level has generated considerable market apprehension, with financial analysts questioning the timeline and likelihood of adequate investment returns.
Forrester analyst Lee Sustar highlighted persistent concerns “about the sustainability of the AI boom,” emphasizing the substantial capital requirements and the relatively modest visible returns to date.
User Growth Maintains Momentum Despite Sequential Decline
Meta’s daily active people metric climbed to 3.56 billion users at the end of March, representing a 4% year-over-year increase.
This figure reflected a minor sequential decrease from the 3.58 billion users reported in the fourth quarter. Meta explained that connectivity issues in Iran and WhatsApp access restrictions in Russia contributed to this decline.
Advertising impressions throughout Meta’s family of applications increased 19% compared to the prior year during the first quarter, while average ad pricing rose 12%. Both metrics demonstrated acceleration relative to fourth-quarter growth rates.
The company’s employee count totaled 77,986 as of March 31.
In recent weeks, Meta disclosed plans to eliminate 8,000 positions — representing roughly 10% of its total workforce — alongside canceling 6,000 unfilled job openings. Leadership characterized these reductions as part of ongoing efficiency initiatives necessary to “offset the other investments we’re making.”
META shares concluded regular trading on April 29 at $669.12, before dropping to approximately $613 during pre-market activity following the earnings announcement.
