Meta Platforms pushed higher its forecast for annual capital spending while reporting quarterly results that topped analyst expectations, yet its shares plunged after the company disclosed a more aggressive build-out of infrastructure.
When Meta released first-quarter results on April 29 it reported revenue of $56.3 billion, above the LSEG-compiled analysts' average estimate of $55.5 billion. In the same update the company raised its projection for 2026 capital expenditure to a range of $125 billion to $145 billion, up from a previous forecast of $115 billion to $135 billion.
The stock reaction was swift. Shares of Meta fell about 10% in early trading on April 30 despite the revenue beat and signs that technology investments are supporting ad sales. Market participants focused on funding dynamics: unlike some competitors such as Alphabet, Amazon or Microsoft, Meta does not have a cloud arm that can help absorb or cushion the costs of a rapid expansion in infrastructure.
That absence of a cloud business to act as a financial buffer, combined with a large and quickly rising capital plan whose benefits are described as unclear and slow to materialize, appears to have unsettled investors. The company’s decision to lift long-term capex targets signals an acceleration of spending even as management argues that ad revenues are being supported by technology changes.
The context for Meta’s announcement included a parallel move by Alphabet. On the same day Alphabet raised its capital expenditure outlook for the year, saying it now expects to spend between $180 billion and $190 billion - a $5 billion increase from the company’s estimate last quarter - and that it plans another significant increase in 2027.
Implications and market reaction
The combination of stronger revenue, larger spending plans, and the lack of a cloud-revenue cushion produced a sharp stock move that underlines investor sensitivity to the funding profile of big technology firms. While Meta’s top-line numbers beat expectations, the company’s more ambitious long-term capex range shifted the focus to balance-sheet endurance and the timeline for returns on those investments.
Full analysis will be published shortly.