META
Earnings? Fine. The bill? Not so fine.
Meta did a pretty classic corporate mic drop on Thursday: revenue jumped 33% to $56.31 billion, adjusted EPS came in at $7.31 vs. $6.79 expected, and ad impressions and pricing were both humming along nicely. In other words, the core ad machine is still doing what the core ad machine does: printing money.
So why did the stock get clobbered?
Because Wall Street heard “we need to spend even more.” Meta lifted its 2026 capital expenditure guide to $125 billion to $145 billion, up from $115 billion to $135 billion in January. That’s the kind of number that makes investors squint at the screen like they just got hit with a surprise dinner bill for the whole table.
The market’s message was loud and unambiguous: yes, the business is strong — but how much of that strength gets swallowed by AI infrastructure spending before shareholders see the payoff?
The Street is already getting nervous
JPMorgan downgraded Meta from Overweight to Neutral and cut its target to $725, citing a tougher path to returns on heavy AI capex beyond advertising. Goldman also trimmed its target, though it stayed a lot more constructive. Translation: even the bulls are starting to ask whether this is smart investment or just a very expensive arms race.
Big picture
This wasn’t an earnings miss. It was a “show me the returns” moment. Meta can still grow like a monster, but if the AI bill keeps rising faster than the payoff, the stock may stay moody even when the numbers look great.