Meta (META) Q2 2026 EPS Misses by 14% as AI Costs Surge 55%
As seen on the 24/7 Wall St. homepage on July 29, 2026.
Meta's AI infrastructure blitz obliterated operating margins: a 55% cost surge, $2.4 billion in legal charges, and $1.18 billion in severance crushed earnings even as ad revenue grew 27% and daily users hit 3.6 billion. EPS missed by 14% at $6.18, snapping six straight beats.
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Meta's Q2 2026 earnings snapped a six-quarter streak of beats in dramatic fashion. A 55% surge in costs — driven by the company's aggressive AI infrastructure build-out — combined with $2.4 billion in legal charges and $1.18 billion in severance to crush the bottom line. Reported EPS came in at $6.18, falling 14% short of the $7.22 consensus estimate.
The pain was concentrated entirely on the cost side. Ad revenue grew 27% and daily active users across Meta's family of apps reached 3.6 billion, both pointing to a fundamentally healthy demand picture. Revenue of $60.8 billion edged past the $60.3 billion estimate, making the EPS miss stand out even more sharply — this was a margin story, not a revenue story.
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Investors will be watching closely to see whether Meta characterizes the cost spike as a one-time reset or the new run rate for its AI ambitions. The prior six quarters all came in above expectations, with EPS ranging from $6.03 in Q3 2024 to $8.88 in Q4 2025, so the Q2 2026 result represents a meaningful step-down that the market will want explained.
Mentioned: META