AI Business
Apr 29, 2026
Meta raises 2026 capital expenditure forecast to $145 billion, impacting stock prices
Apr 29, 2026
AI Summary
Meta Platforms has increased its 2026 capital expenditure forecast to between $125 billion and $145 billion, citing higher component costs and data center expenses. Following this announcement, Meta's stock fell over 6%, contrasting with gains seen by competitors Alphabet and Amazon, who reported positive AI-related growth.
- Meta has raised its 2026 capital expenditure guidance to $125 billion to $145 billion, up from $115 billion to $135 billion.
- The increase is attributed to higher prices for components and additional data center costs.
- In 2025, Meta spent $72.2 billion on capital expenditures, and the new forecast nearly doubles that amount.
- Following the announcement, Meta's stock dropped more than 6% in after-hours trading.
- In contrast, Alphabet and Amazon saw their stock prices rise after reporting earnings that included AI-related growth.
- CEO Mark Zuckerberg mentioned that rising memory pricing is a factor in the increased costs and expressed confidence in the investment's potential returns.
- Meta reported Q1 revenues of $56.3 billion, a 33% increase year-over-year, with operating income rising 30% to $22.9 billion.
- The company noted a significant tax benefit that contributed to a 61% increase in profits to $26.8 billion.
- Total expenses rose 35% to $33.4 billion, primarily due to infrastructure costs and employee compensation.
- Meta plans to reduce its workforce in May, cutting hundreds of jobs across various teams.
- The company is investing heavily in AI infrastructure to enhance its advertising business and develop personal AI agents.
- Zuckerberg stated that new AI models will allow for a deeper understanding of user preferences and improve content personalization.
- Analysts have raised concerns about the return on investment from the increased capital expenditures, indicating investor frustration over cash burn.
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