Meta stock has fallen about 29% from its high near $795 set last August to about $565, even after first-quarter 2026 revenue rose 33% year over year. The drop leaves Meta Platforms worth around $1.4 trillion while shareholders are being asked to absorb a faster buildout in AI-related spending.
Revenue reached $56.3 billion in the first quarter of 2026, up from 24% growth in the fourth quarter of 2025. That acceleration came with income from operations of $22.9 billion and an operating margin that held at 41%, so the business is still converting more sales into profit even as the stock price says the market wants a different pace of spending.
Susan Li raises the spending bar
Susan Li said on Meta’s first-quarter earnings call: “Our experience so far has been that we have continued to underestimate our compute needs even as we have been ramping capacity significantly”. Meta now expects to spend $125 billion to $145 billion on capital expenditures in 2026, up from a range of $115 billion to $135 billion just a quarter earlier. Capital spending was about $72 billion in 2025 and about $39 billion in 2024, so the budget is moving fast enough to change the company’s cost base, not just its headline guidance.
3.56 billion people used at least one of Meta’s apps every day in March, up 4% from a year earlier, while the number of ads served across Facebook, Instagram, and its other apps rose 19% and the average price per ad rose 12%. Those figures explain why revenue is still climbing at a double-digit rate: more usage gives Meta more inventory to sell, and higher prices convert that traffic into cash at a faster clip.
Meta Platforms and the 17 multiple
17 is where Meta’s forward price-to-earnings ratio sits, a level that suggests the market is not valuing the shares as if growth alone will justify the new spending plan. Meta’s total expenses for 2026 are guided at $162 billion to $169 billion, so the company is signaling that the bill for AI infrastructure will keep running well beyond the current quarter.
29% is the gap between the stock’s last August peak and today’s level, and that split with the operating results is the central contradiction. Meta’s business is improving rapidly, but the shares are lower because investors are weighing the scale of AI capital spending against the chance that depreciation from new data centers, chips, and power could pressure profits for years after the buildings are up.
Whether Meta’s larger AI spending turns into faster growth or wider margins remains unproven, and the market is pricing that uncertainty now rather than later.
