Meta Earnings & AI Investment: Q1 Results & Stock Impact

Meta Platforms reported first-quarter 2026 earnings of $7.31 per share, exceeding analyst estimates of $6.79, on revenue of $56.31 billion, also surpassing expectations of $55.45 billion. However, the company’s stock fell approximately 7% in extended trading Wednesday following the release, as investors reacted to increased capital expenditure forecasts and disappointing user growth, according to reporting from CNBC and Patria.cz.

The company’s revenue climbed 33% from $42.3 billion a year earlier, marking the fastest quarterly growth since 2021. This growth is attributed to Meta CEO Mark Zuckerberg’s focus on artificial intelligence investments, which have strengthened the company’s core advertising business, CNBC reported.

Increased Capital Expenditure

Meta announced it now expects capital expenditures for 2026 to be between $125 billion and $145 billion, an increase from its previous forecast of $115 billion to $135 billion. The company stated this increase “reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity,” according to a report by Yahoo Finance.

Overall expenses are projected to remain in the range of $162 billion to $169 billion for the year. This commitment to increased spending on infrastructure comes as Meta continues to invest heavily in AI, following a $14.3 billion investment in Scale AI and the hiring of CEO Alexandr Wang in June 2025, as reported by CNBC.

User Growth Disappoints

Despite the strong financial results, Meta reported daily active people (DAP) of 3.56 billion for the first quarter, a 4% increase year-over-year but a more than 5% decrease from the fourth quarter of 2025. Wall Street had projected DAP to reach 3.62 billion.

The company attributed the quarter-over-quarter decline in users, in part, to “internet disruptions in Iran” and “a restriction on access to WhatsApp in Russia,” according to CNBC. These factors impacted user engagement and growth during the period.

Profit Increase

Meta’s net profit increased by 61 percent to 27 billion dollars, exceeding expectations, according to Seznam Zprávy. This increase in profit was partially due to an $8 billion one-time tax benefit, bringing earnings per share to $10.44. Excluding the tax benefit, earnings per share would have been $7.31, as reported by Yahoo Finance.

Looking ahead, Meta anticipates current quarter revenue to fall between $58 billion and $61 billion. The company’s continued investment in AI and its efforts to navigate geopolitical challenges will be key factors influencing its performance in the coming quarters.

We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs. We’re on track to deliver personal superintelligence to billions of people.

Mark Zuckerberg, Meta founder and CEO