Meta Stock Dives Below $630 on Massive Spending, Ignoring Meta Platforms Report of 33% Revenue Growth
Despite Meta's strong revenue beat, a selloff was triggered by markets' intense attention on rising AI-related spending plans.
Quick overview
- Meta reported Q1 revenue of $56.31 billion, exceeding expectations but faced a negative investor reaction.
- The company's stock fell 5-6% in after-hours trading due to concerns over increased capital expenditures for AI investments.
- Despite strong revenue growth and stable margins, investor skepticism remains high regarding future profitability amid rising costs.
- Meta raised its 2026 capex forecast significantly, intensifying fears of overextension in AI infrastructure spending.
Live META Chart
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Despite Meta’s strong revenue beat, a selloff was triggered by markets’ intense attention on rising AI-related spending plans.
Earnings Beat Fails to Lift Sentiment
On April 29, 2026, Meta Platforms Inc. reported first-quarter revenue of $56.31 billion, slightly ahead of expectations of $55.56 billion. The result reflected continued strength across its core advertising ecosystem and user engagement trends. Despite the headline beat, investor reaction remained notably negative, suggesting diminishing sensitivity to near-term earnings upside.
Spending Surge Overshadows Performance
The company’s stock fell roughly 5–6% in after-hours trading, dropping below the $630 level as concerns over escalating capital expenditures dominated sentiment. Meta raised its 2026 capex forecast to a range of $125 billion to $145 billion, up from $115 billion to $135 billion previously, intensifying fears of overextension in AI infrastructure investment.
Meta Chart Weekly – MAs Turning from Support Into Resistance 
Meta stock price fell to $520 in March as investors reassessed the company’s spending trajectory. However we saw a swift reversal higher in April and it extending the upside further to $691.50 in April, but buyers failed to push above the 500 weekly SMA (yellow) and the stock started to reverse, while today it fell below $630 after the earnings report showed huge investment.
Margin Pressure and Investor Skepticism
While strong cash flow and advertising resilience underline operational strength, the scale of planned AI spending has raised uncertainty around future margins. Investors appear increasingly reluctant to reward aggressive expansion without clearer timelines for monetisation, weighing growth ambitions against rising cost risks.
Meta (FCB) Q1 Earnings Report
Strong Revenue and Profit Growth
- Revenue rose 33% year over year to $56.31 billion
- Operating income increased 30% to $22.87 billion
- Net income jumped 61% to $26.77 billion
- EPS reached $10.44, up 62%, boosted by a tax-related benefit
Stable Margins Amid Rising Costs
- Operating margin held steady at 41%
- Total expenses climbed 35% to $33.44 billion
- Cost growth slightly outpaced revenue expansion
Advertising and User Strength
- Ad impressions increased 19%, driven by higher engagement
- Average price per ad rose 12%
- Daily active people reached 3.56 billion (+4% YoY)
Cash Flow and Capital Returns
- Operating cash flow: $32.23 billion
- Free cash flow: $12.39 billion
- Dividends paid: $1.35 billion
Rising Investment Pressure
- Capex surged to $19.84 billion for AI and data centres
- Cash reserves stood at $81.18 billion
- Workforce increased modestly to 77,986 employees
- Heavy spending raised concerns over future margin compression
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