Meta Platforms (META) reported a strong first quarter with earnings per share of $10.44 and revenue of $56.3 billion, yet the company’s stock fell about 6% in after-hours trading. This unexpected dip comes as analysts had anticipated adjusted earnings of $8.15 per share on revenue of $55.5 billion, creating a backdrop of uncertainty.
A year ago, Meta’s forecasts for 2025 spending ranged between $113 billion and $118 billion. Now, the company has raised its capital expenditures forecast for 2026 to a staggering $125 billion to $145 billion. This shift—prompted by higher component pricing and additional data center costs to support future capacity—has investors questioning the sustainability of Meta’s growth.
Key financial highlights:
- First quarter EPS: $10.44
- Revenue: $56.3 billion
- Daily active users increased by 4% to reach 3.56 billion
- Overall expenses expected to hit between $162 billion and $169 billion this year
- Planned workforce reduction of 8,000 employees, or 10%
Despite the strong earnings, some analysts express caution. Oppenheimer analysts indicated that while Meta is likely to report robust revenue growth, the company faces limited profit upside due to rising compute costs associated with its AI initiatives. This could offset the revenue gains from its expanding user base.
Importantly, all 20 analysts tracked by Visible Alpha rate Meta stock as a “buy,” with an average price target of $865. However, observers note that Meta’s stock has exhibited considerable volatility—moving more than 10% following earnings in three of the last four quarters.
The future remains uncertain, particularly as Meta navigates these significant capital expenditures alongside its strategic shift toward AI spending. As the company implements workforce cuts to balance these investments, analysts will be watching closely for how these changes affect both user engagement and profitability.