Meta AI Capex (Up 7%) Is a Bad Surprise -- Could This Be the Next Metaverse?
Meta Platforms reported a 33% year-over-year increase in quarterly revenue, but its capital expenditures guidance for 2026 was higher than expected, causing its stock to drop 8.6%. The company's AI spending plans are being questioned by investors, who are comparing it unfavorably to Alphabet's AI-driven revenue streams.
Meta Platforms reported earnings, with quarterly revenue up 33% year-over-year. However, the company's capital expenditures guidance for 2026 was $125 billion to $145 billion, higher than the previous estimate of $115 billion to $135 billion. Meta's stock dropped 8.6% following the earnings report. Investors are questioning the company's AI spending plans, citing a lack of clear revenue streams from AI. Alphabet, which also reported higher capex guidance, is seen as having a more convincing AI story due to its revenue from AI cloud services. Meta's AI investments are being compared to its previous Metaverse experiment, which failed to deliver returns.
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