Meta Platforms (META) Q1 2026 Earnings Preview: What Wall Street Is Watching Tonight

With Alphabet announcing on their earnings tonight that capital expenditures would be up ‘significantly’ again in 2027, it didn’t take Wall Street to ask the biggest question on their mind: “where will Meta Platforms (META) capex be in 2027?”

Zuckerberg answered first, with CFO Susan Li following up. They didn’t give a defintive answer, but said enough investors can plan on more growth ahead:

Mark Shmulik Bernstein Institutional Services LLC, Research Division

Mark, I guess now that we’ve got MuSpark Newmark kind of out there launched — how are you thinking about the team’s focus here kind of divided on to further model training runs and kind of further specialization in that personal intelligence goal versus product launches and kind of shipping more product out the door. And Susan, I guess, kind of as a follow-up to Brian’s question, I know it’s too early to discuss 2027 CapEx. But we’ve had peers mention tonight a potential significant step-up. Any way to think about dimensionalizing kind of how we think about some of the returns or traction this year and how it might affect the 2027 spend?

Mark Zuckerberg Chief Executive Officer

I mean I think the road map from the team is — has been pretty consistent. So we have the research team, which is focused on scaling increasingly intelligent models with capabilities for the specific things that we’re focused on, which are business and personal agents. So we’re — we just released our first model, and I talked about in my comments how we’re climbing the scaling ladder towards greater capabilities and scale for the models. That work continues.

We have our next set of more advanced models in training now. And that is — that work will, I think, just continue. I mean that’s a loop. I don’t think you were going to be done with that anytime soon. We’re going to have teams that are just consistently focused on training more intelligent and more capable models and the way that we want. Then we have our product team, and that team is now really unlocked to be able to build things on top of our models because we now have a very strong model. So before this, we have been prototyping a bunch of things using other different models, whether it was our previous older models or kind of using the APIs from other companies. And now we’re unlocked to be able to go build things and get them to scale on top of our own models.

So I think you will see that over some period of time. I tried in my opening remarks to give a bit of a sense of where we’re going, but I think that more of the details of that will become clear over the coming months. And I think that these are just both loops that we’ll iterate on. We’ll keep on iterating on the intelligence. We’ll keep on working on building new products and scaling the products. And then as we get to product market fit, we’re also going to increasingly focus on building the businesses around them and decreasing the costs. And this is kind of how we’ve done everything over the last 20 years of running the company, and that is basically the plan.

Susan J. Li Chief Financial Officer

Mark, on your second question, we aren’t providing a specific outlook for 2027 CapEx. And we are, frankly, undergoing a very dynamic planning process ourselves as we’re working through what our capacity needs will be over the coming years. Our experience so far has been that we have continued to underestimate our compute needs even as we have been ramping capacity significantly as the advances in AI have continued and our teams continue to identify compelling new projects and initiatives. And now to, there are very compelling internal use cases. So our expectation is that compute will become even more central to the business going forward.

And it will be critical to determining the quality of the models we develop, the types of products we can introduce, how productive we can be as an organization. So we’re going to continue building out our infrastructure with flexibility in mind. And if we end up not needing as much as we anticipate, we can choose to bring it online more slowly or reduce our spending in future years as we grow into the capacity that we’re building now.

Meta Platform’s call is ongoing. The company’s stock is currently down about 5.8% on disappointing guidance and raising capex expectations to $125 billion to $145 billion.

On the call, CEO Mark Zuckerberg didn’t take long to say what the company’s biggest milestone was this year. Here’s what he had to say:

“Our biggest milestone so far this year has been the release of our Muse family of models and our first model MuSpark along with a significantly upgraded new version of Meta AI. This was the first release from Meta Super Intelligence Labs, and it shows that our work is on track to build a leading lab. Over the past 10 months, we have built the strongest research team in the industry and established the scientific and technical foundations to scale very advanced models.

Spark is just one step on that scaling ladder, and we are already training even more advanced models. But Spark has already made Meta AI a world-class assistant that leads in several areas related to our vision of personal super intelligence, including visual understanding, health, shopping, social content, local, creating games and more. We’re hearing very positive feedback on it so far. We’ve seen large increases in Meta AI use since releasing the updates, and the Meta AI app has consistently been near the top of the app stores as well.”

Wall Street likes Meta’s spending on AI for its own products, but is much more skeptical on their spending around frontier models. Zuckerberg immediately made it clear that their efforts to build a frontier model remain his top priority.

Overall Grade: B. Meta Platforms (NASDAQ:META) delivered 33.08% revenue growth, but a capex raise sent shares down 6.8% in the first hour post-release.

Overall Assessment

The advertising engine is firing, yet the $10 billion capex hike defines the report. Watch tonight’s call for AI ROI commentary.

Meta guided Q2 2026 revenue of $58 to $61 billion. At the midpoint that is $59.5 billion, above the $59.6 billion Wall Street was expecting. Revenue growing at roughly 30% year over year heading into Q2 is a strong result for a company of Meta’s scale.

Full year 2026 total expenses held unchanged at $162 to $169 billion. Management reiterated that 2026 operating income will exceed 2025’s $83.28 billion despite the massive infrastructure spending. That commitment to profitability growth is important context and something Zuckerberg will lean on heavily tonight.

The problem is the capex line. The raise from $115 to $135 billion up to $125 to $145 billion is the only thing investors are focused on right now. Higher component pricing and additional data center costs are the cited reasons. With shares already up 27% in the past month the market had very little tolerance for any negative surprise and this qualifies.

Meta beat on revenue. Meta beat on EPS. Meta guided Q2 revenue of $58 to $61 billion which is strong. And shares are still down 6% after hours.

The reason is the capex raise. Management bumped 2026 capital expenditure guidance from $115 to $135 billion up to $125 to $145 billion. That is a $10 billion increase at both ends of the range, citing higher component pricing and additional data center costs. Investors were already nervous about the original range. This is not what they wanted to see.

It is worth noting the EPS headline of $10.44 is misleading. An $8.03 billion tax benefit inflated the bottom line significantly. Strip that out and adjusted EPS was closer to $7.31, which is still a solid beat against the $6.82 consensus but not the blowout the headline implies.

The underlying ad business is healthy. Revenue grew 33% to $56.31 billion. Ad impressions rose 19% and price per ad climbed 12%. Family daily active people held at 3.56 billion, though that was a slight sequential decline driven by internet disruptions in Iran and a WhatsApp restriction in Russia.

Mark Zuckerberg said Meta is on track to deliver personal superintelligence to billions of people.

Revenue grew 33% to $56.31 billion, topping the $55.5 billion consensus and coming in well above the midpoint of the $53.5 to $56.5 billion guidance range. That is the strongest revenue growth rate Meta has posted in several quarters.

Ad impressions grew 19% and price per ad climbed 12%. Both metrics running hot simultaneously is the ideal scenario for the advertising business and gives management room to argue that the AI investments in ranking and recommendation systems are paying off directly in the core revenue engine.

Family of Apps operating income was $26.9 billion with a strong margin profile. Reality Labs lost $4.03 billion, roughly in line with expectations and actually slightly better than last year’s Q1 loss of $4.21 billion.

Q2 revenue guidance of $58 to $61 billion implies continued acceleration and tops the $59.6 billion Wall Street was expecting at the midpoint.

Capital expenditure guidance raised to $125 to $145 billion from $115 to $135 billion. That single line item is responsible for the 6% after hours decline. Everything else in this report is strong. The market’s entire concern tonight comes down to whether Zuckerberg can justify an extra $10 billion in spending on the conference call.

Meta Platforms (NASDAQ: META) just reported Q1 2026 results. Here’s what the company delivered:

Revenue: $56.31 billion EPS: $10.44

Here’s what Wall Street was expecting:

Revenue: $55.5 billion EPS: $6.82

The EPS number looks like a massive beat but there is an asterisk. An $8.03 billion tax benefit inflated the bottom line significantly. Strip that out and EPS was closer to $7.31, which is still a solid beat but not the blowout the headline suggests.

The real story is the capex raise. Meta just bumped its 2026 capital expenditure guidance from $115 to $135 billion up to $125 to $145 billion. That is a $10 billion increase at both ends of the range, citing higher component pricing and additional data center costs. Investors were already nervous about the original range and this is not what they wanted to see.

Revenue of $56.31 billion grew 33% year over year and topped estimates. Ad impressions grew 19% and price per ad rose 12%. Those are strong numbers. Q2 guidance of $58 to $61 billion is also solid. But right now the market only cares about one thing and that is the capex number.

Shares are down 6.15% after hours. The conference call starts at 5:30 p.m. ET and Zuckerberg will need to make a compelling case for why that extra $10 billion in spending is worth it.

Several factors could swing the post-report reaction beyond headline beat odds.

• FX flip risk: Management guided to an approximately 4% FX tailwind to Q1 2026 YoY revenue, up notably from prior quarters. A stronger dollar into Q2 could reverse this quickly.
• EU DMA exposure: Ongoing Less Personalized Ads changes remain a live risk to European ad revenue, despite Q4 alignment commentary.
• Youth litigation: Multiple U.S. trials are scheduled in 2026 that may produce material losses, rarely modeled by analysts.
• Tax volatility: The One Big Beautiful Bill Act drove a $15.93B non-cash tax charge in Q3 2025; commentary on cash tax savings could shift free cash flow models meaningfully.

Watch capex tone closely against the $115-135 billion 2026 range.

Prediction markets continue to forecast a strong beat for Meta tonight. Polymarket currently assigns a 90% chance Meta will top expectations.

While that might sound good, consider that Amazon is currently at a 93% chance tonight, Alphabet at a 98% chance, and Microsoft matches Meta’s 90% odds.

Meta beat its EPS last quarter posting $8.88 versus expectations of $8.18. Shares soared the next day, but declined in the following weeks as investors grew more concerned with the company’s aggresive capex plans this year.

Still, Wall Street will be most closely watching a couple figures tonight. First, does Meta’s AI investment keep its ad impression growth high? The company forecast to strong revenue growth this year.

Second, what signals/commentary will the company provide on its spending plans? If Meta’s spending comes in ‘hotter’ than expected, that could cause a drop in the company’s share price tomorrow.

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