The move underscores the scale of Big Tech’s ongoing AI investment race—but investors reacted negatively, sending shares of Meta Platforms down around 5% in extended trading.
The Facebook-parent now expects 2026 capital expenditure to fall between $125 billion and $145 billion, up from its previous range of $115 billion to $135 billion, as it continues building out AI infrastructure across its global operations.
“We continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the U.S., which may ultimately result in a material loss,” the company warned, highlighting growing regulatory pressure in both the EU and the U.S.
Despite the cautious tone, Meta reported stronger-than-expected revenue for the first quarter, bringing in $56.31 billion compared with analyst estimates of $55.45 billion. It also forecast second-quarter revenue between $58 billion and $61 billion, broadly in line with expectations.
User engagement remained steady, with family daily active people—its core measure of cross-app usage—rising 4% year-over-year to 3.56 billion across platforms including Instagram, WhatsApp, and Threads.
The results come amid sweeping internal changes as CEO Mark Zuckerberg accelerates efforts to embed AI across the company’s products and workflows, including workforce reductions and reorganization around AI-focused teams.
Meta has been heavily investing in infrastructure and talent, including high compensation for teams working on its Meta Superintelligence Labs, which recently released its AI model Muse Spark. The company has also begun installing tracking software on some U.S. employee systems to capture interaction data such as mouse movements and keystrokes to train AI agents capable of performing work tasks autonomously.
Advertising remains the company’s financial backbone, funding its aggressive AI expansion. Meta’s ad ecosystem—spanning Instagram, WhatsApp, Facebook, and Threads—continues to benefit from automation tools that optimize targeting and performance for advertisers.
The company has also expanded monetization across newer surfaces, including ads on WhatsApp and Threads, increasing competition with platforms like X Corp (formerly Twitter) and reinforcing its position in the short-form video battle against TikTok and YouTube Shorts.
Industry projections suggest Meta is on track to overtake Alphabet as the world’s largest digital advertiser this year, with expected global net ad revenue of $243.46 billion versus Alphabet’s $239.54 billion, according to Emarketer.
Meta’s AI push is also reshaping its product strategy. The company recently expanded its Meta AI business assistant, aimed at helping advertisers optimize campaigns and resolve technical issues in real time.
However, regulatory risks remain a growing concern. China recently ordered Meta to unwind a more than $2 billion acquisition of AI startup Manus, adding geopolitical pressure to an already complex operating environment.
While Meta continues to demonstrate strong revenue performance, its escalating AI spending, legal exposure, and restructuring costs are increasingly testing investor patience—even as it positions itself for long-term dominance in the AI-driven internet economy.