Meta Platforms (META) hit by investor concerns over sharply raised AI spending guidance
Meta Platforms shares are trading 9.8% lower, at $603.18, on 30 April 2026, as investor concerns over the company's sharply raised artificial intelligence-related capital expenditure guidance continue to weigh on the stock. The decline follows an initial sell-off last Thursday after the company's Q1 earnings release.
The social media giant projected 2026 AI-related capital expenditure guidance between $125 billion and $145 billion, an increase from its previous forecast of $115 billion to $135 billion. This outlook overshadowed robust first-quarter earnings, which saw Meta report $10.44 earnings per share and $56.3 billion in revenue, both exceeding analyst expectations.
Fears of profitability erosion from these significant AI and data centre investments have driven the sustained market reaction. While Meta announced job cuts of approximately 8,000 roles, intended to offset costs, these measures have not reassured investors. The current trading price of $603.18 represents a notable drop from Wednesday's close of $669.12.
Why Meta's AI Spending Spooked Investors
Meta Platforms operates a vast digital ecosystem, connecting billions of people through its social media platforms like Facebook, Instagram, and WhatsApp. Its core business model revolves around selling highly targeted digital advertising space to businesses, leveraging the extensive user data and engagement generated across its services. Essentially, Meta provides the audience and the tools for advertisers to reach them, generating substantial revenue from these digital campaigns.
Today's significant share price movement stems directly from investor apprehension over Meta's sharply increased capital expenditure guidance for artificial intelligence. The company now projects spending between $125 billion and $145 billion on AI-related infrastructure in 2026, a substantial jump from its earlier forecast of $115 billion to $135 billion. While Meta’s first-quarter earnings exceeded expectations, reporting $10.44 earnings per share and $56.3 billion in revenue, this robust performance was overshadowed by the prospect of such massive, immediate investment. The concern is that these heavy outlays, despite their long-term potential, will erode profitability in the near term.
This fear of profitability erosion has directly translated into Meta's share price decline. The stock is trading 9.8% lower today, at $603.18, a notable drop from yesterday's close of $669.12, reflecting investors' immediate reaction to the increased spending outlook.
Think of it like a successful chef who announces plans to build a state-of-the-art, futuristic kitchen. While the new kitchen promises revolutionary dishes in the future, the immediate cost of construction is so enormous that investors worry the restaurant might struggle to turn a profit for a while, even if the current menu is a hit. The immediate investment overshadows current success, creating uncertainty about short-term returns.
Meta Platforms
Meta Platforms, Inc. (META), a Communication Services sector entity, operates within the Internet Content & Information industry, developing products for global connection and sharing via mobile, PC, VR headsets, and wearables. Its operations are divided into two segments: Family of Apps and Reality Labs. The Family of Apps segment encompasses Facebook for sharing and discovery, Instagram for photo and video sharing, Messenger for cross-platform communication, and WhatsApp for private and business messaging. The Reality Labs segment focuses on augmented and virtual reality products, including consumer hardware, software, and content designed to foster connectivity. Formerly known as Facebook, Inc., the company rebranded in October 2021. Established in 2004, Meta Platforms, Inc. is headquartered in Menlo Park, California.