Meta reported a strong first quarter, with net income rising 61% year over year to $26.8 billion and revenue climbing 33% to $56.3 billion. Yet the results failed to reassure investors, with shares falling more than 5% in after-hours trading as attention turned to the company’s escalating AI expenditure.
CEO Mark Zuckerberg confirmed that Meta now projects capital spending of between $125 billion and $145 billion for 2026, surpassing previous estimates and driven largely by rising infrastructure and memory costs. The scale reflects Meta’s ambition to compete directly with AI leaders such as OpenAI and Anthropic, a goal that has already prompted aggressive hiring of over 50 AI researchers from rivals and the launch of its overhauled model, Muse Spark.
CFO Susan Li acknowledged that the company has consistently underestimated its own compute needs and declined to offer a 2027 spending outlook, citing an ongoing and fluid planning process.
Meanwhile, Meta’s Reality Labs division lost another $4 billion in the quarter — consistent with an average quarterly loss of roughly $4 billion stretching back to 2021, totaling $83.5 billion over that period. As metaverse ambitions fade, AI infrastructure is rapidly becoming the dominant cost center, and there is no clear ceiling in sight.
