Meta stock – Meta’s revenue and profits accelerated in the first quarter of 2026, but its stock still slid roughly 29% from a high near $795 last August to about $565 as of this writing. The company is also raising a massive AI-linked capital budget for 2026—now $125 billi
When Meta’s stock hit a high near $795 last August, it looked like momentum was building. Now the market is living with a different feeling: roughly a 29% drop to about $565 as of this writing.
The contrast is sharp. Inside the business, the pace picked up.
In the first quarter of 2026. Meta’s revenue rose 33% year over year to $56.3 billion—an acceleration from 24% growth in the fourth quarter of 2025 and the company’s fastest top-line growth in more than a year. Two factors drove that increase: the number of ads Meta served across Facebook. Instagram. and its other apps rose 19% year over year. while the average price per ad rose 12%. Engagement kept expanding, too. In March, 3.56 billion people used at least one of Meta’s apps every day, up 4% from a year earlier.
Profitability improved as well. Income from operations grew 30% to $22.9 billion, and the operating margin held at 41%. The company points to the same AI spending that has worried investors in recent months as part of the reason—sharper ad targeting and ranking that keep users engaged. enabling Meta to charge advertisers more.
So why did the stock fall anyway?
The answer sits in the cost numbers.
Meta now expects to spend $125 billion to $145 billion on capital expenditures in 2026. That range was raised from $115 billion to $135 billion just a quarter earlier. Looking further back makes the ramp feel less like a plan and more like a climb: capital spending was about $39 billion in 2024 and about $72 billion in 2025. putting this year’s budget on track to nearly double again.
Meta says these capital expenditures are largely intended to support AI efforts—the data centers, chips, and power needed to train and run the company’s models. The spending extends beyond capital spending, too. Total expenses for 2026 are guided at $162 billion to $169 billion.
On the first-quarter earnings call, Meta chief financial officer Susan Li said, “Our experience so far has been that we have continued to underestimate our compute needs even as we have been ramping capacity significantly.”
That admission lands at the center of the market’s unease. Spending on this scale only makes sense if it eventually shows up in faster growth or wider margins—and the return on that investment is still unproven. There’s also timing risk: much of the money will reach the income statement later through depreciation. a cost that can weigh on profits for years after the data centers go up.
Still, management says it has flexibility. Li said Meta is building with flexibility and could bring capacity online more slowly or cut spending in later years if demand doesn’t materialize. But the pattern so far has been the opposite—raising the budget rather than trimming it.
All of this leaves investors in a familiar bind: the business is performing, while the spending ramp is getting bigger.
Yet for some investors, what keeps the situation compelling is that the stock’s valuation doesn’t look stretched. Meta’s forward price-to-earnings ratio sits at about 17, measured against analysts’ consensus estimate for earnings over the coming year. The forward figure matters here because the company has had one-time tax items distort reported earnings over the past year. leaving the trailing multiple less representative of regular operations.
With revenue growth better than 30%, the valuation can look like a modest price rather than a warning.
So is Meta a buy, sell, or hold?
The call here is buy—but a measured one.
The case starts with the ad business: it’s growing fast, and the stock isn’t priced for much. That makes the sell-off feel more like a discount than a signal that the company’s core engine has broken.
What prevents going bigger right away is the spending. A bet of this size on an uncertain payoff can punish the stock if results disappoint—or if the budget keeps climbing again.
For now, the approach is to start small and add as the company proves what the market wants most: that the AI investment starts to show up in faster profit growth rather than just a bigger bill.
Meta’s recent trading snapshot adds to the sense of volatility. The stock is up 0.28% on the day, with a current price of $564.15. The day’s range is $551.54 to $565.52, and the 52-week range is $520.26 to $796.25. Market cap sits around $1.4T, and volume is 283K with an average volume of 17M. Gross margin is 81.94%, and dividend yield is 0.37%.
Meta META stock AI spending capital expenditures 2026 Susan Li operating margin ad revenue valuation stock buy sell hold