Meta Raises Spending Projections, Stocks Decline

Meta Raises Capital Spending Forecast Amid Layoff Plans and AI Investment

Meta Platforms, the parent company of Facebook, has increased its annual capital spending forecast for 2026, targeting a range of $125 billion to $145 billion. This estimate is higher than the previously forecasted range of $115 billion to $135 billion. The decision to invest more in capital expenditures comes as the company seeks to reduce costs through planned layoffs.

The company's shares fell by around 5% in extended trading following the announcement. Meta also warned that it is facing significant legal and regulatory challenges in both the EU and the US, which could negatively impact its business and financial results.

Revenue Exceeds Expectations

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Meta reported first-quarter revenue of $56.31 billion, surpassing the average analyst estimate of $55.45 billion compiled by the London Stock Exchange Group (LSEG). The company expects second-quarter revenue to be in the range of $58 billion to $61 billion, which is largely in line with estimates of $59.5 billion.

The number of family daily active people (DAP), a key metric used by Meta to track unique users who open any of its apps in a day, rose by 4% in the first quarter compared to the same period last year, reaching 3.56 billion.

Investments in AI Infrastructure

Meta has been investing heavily in AI infrastructure and has been restructuring its workforce to focus on this technology. The company's robust ad platform, which offers tools for automating and personalizing advertisers' campaigns, has remained a key growth engine and has supported its investments in AI infrastructure.

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Meta is projected to surpass Alphabet as the world's largest online advertiser this year, according to research firm Emarketer. The company is also expanding the availability of its Meta AI business assistant, designed to help advertisers optimize campaign performance and resolve technical issues through real-time guidance.

AI Training and Development

Meta is installing new tracking software on U.S.-based employees' computers to capture mouse movements, clicks, and keystrokes to train its AI models. This is part of a broader initiative to build AI agents that can perform work tasks autonomously.

Meanwhile, China has ordered Meta to unwind its $2 billion-plus acquisition of AI startup Manus, citing increased scrutiny of US investment in domestic startups developing frontier technologies.