Meta Platforms (META) stock fell about 6% in after-hours trading after the company reported its first quarter earnings. The earnings per share (EPS) reached $10.44 on revenue of $56.3 billion, surpassing Wall Street expectations. Analysts had anticipated adjusted earnings of $8.15 per share on revenue of $55.5 billion.
Despite the strong earnings report, Meta announced an increase in its 2026 capital expenditures (capex) forecast to between $125 billion and $145 billion. This decision raised concerns about future profitability as the company also plans to cut 8,000 workers, or 10% of its workforce, to offset investments.
Key statistics:
- Meta’s EPS would have been $7.31 without an $8 billion one-time tax benefit.
- The overall expenses for Meta are projected to reach between $162 billion and $169 billion for the year.
- The number of daily active users increased by 4% to 3.56 billion as of March.
Oppenheimer analysts noted that while Meta is likely to report strong revenue growth, higher compute costs for its AI models could limit profit upside. They stated that “Meta is likely to report strong revenue growth, but said that the company faces limited profit upside as higher compute costs for Meta’s AI models could offset the revenue gains.”
All 20 analysts tracked by Visible Alpha rate Meta stock as a “buy” with an average price target of $865. However, Meta’s stock has shown volatility in the past; it moved more than 10% following earnings in three of the last four quarters.
Meta’s headcount stood at 77,986 as of March 31. The company’s strategy reflects expectations for higher component pricing this year and additional data center costs to support future capacity.
The next steps for Meta will involve managing these increased expenses while trying to maintain user growth and investor confidence amidst ongoing market fluctuations.
