Meta’s earnings were hot — but Wall Street flinched

The beat that didn’t save the stock

Meta did the thing companies dream about: it crushed earnings. Revenue landed around $56 billion and EPS came in at $10.44, way ahead of the $6.67 analysts were expecting. Normally that’s the kind of print that gets you confetti and a victory lap.

Instead? Shares got body-checked.

Why the market hit the brakes

Investors looked past the shiny quarter and zeroed in on the bill coming due. Meta said it expects to spend between $125 billion and $145 billion in 2026, up from its earlier $115 billion estimate, as it pours cash into AI infrastructure, data centers, computing power, and chips.

That’s great if you love the AI arms race. Less great if you’re trying to model margins and cash flow without breaking into a sweat.

The real investor headache

Here’s the tension:

• The core ads business is still humming, helped by AI-driven improvements in targeting and engagement.
• The company hasn’t yet turned those AI investments into a fresh revenue stream.
• User growth was still up 4% year over year, but it slipped 5% from the prior quarter, which Meta blamed on the US-Iran war.

So yes, Meta’s business is still strong. But the market is basically saying: “Cool quarter — now show me the payoff for this giant AI tab.”

Big picture

Meta is trying to buy a front-row seat in the next phase of the internet. The catch is that the rent is expensive, and investors are getting less patient by the minute. If the AI spend turns into durable revenue, today’s selloff could look ridiculous in hindsight. If not, this gets a lot uglier from here.