Meta Q1 Revenue Up 33% but Stock Falls as Capex Guidance Hits $145B

Meta reported Q1 2026 results on April 29. Revenue reached $56.3 billion, up 33% year over year. Operating income grew 30% to $22.9 billion, and net income jumped 61% to $26.8 billion. The numbers beat expectations — but investors focused on the spending outlook.

The Capex Problem

Meta raised its 2026 capital expenditure guidance from $115–$135 billion to $125–$145 billion. The company cited higher component pricing and additional data center costs to support future capacity. Shares fell between 6% and 10% after the announcement, as investors questioned the near-term return on the accelerating AI spend.

AI Ads Starting to Show Returns

For the first time, Meta put a specific number on AI-driven ad performance. AI tools including Meta Lattice and the GEM model boosted ad conversion rates by more than 6% in Q1 — the first quarter where the impact has been quantified, rather than described qualitatively.

Zuckerberg's AI Bet

CEO Mark Zuckerberg said on the earnings call that 2026 is "the year AI agents fundamentally transform Meta's business," and indicated the aggressive investment pace would continue. At $145 billion, Meta's capex forecast now rivals Alphabet's ($190B) as one of the largest AI infrastructure bets in the industry.

Source: CNBC, Meta Investor Relations