Meta Platforms stock outlook amid AI spending surge

Meta Platforms reported first‑quarter 2026 revenue of $56.3 billion, up 33% year over year, with advertising accounting for about $55 billion of that total. AI‑driven improvements boosted engagement on Instagram Reels and Facebook video, and advertisers are increasingly using the company’s AI tools.

Despite the top‑line growth, the company plans capital expenditures of $125‑$145 billion for 2026, roughly double the previous year, to fund its AI and Reality Labs initiatives. This spending pressure has kept earnings per share modest—adjusted EPS $7.31, after an $8 billion tax benefit—and free cash flow at $12.4 billion. Reports suggest Meta may consider raising tens of billions through a stock offering to finance the build‑out.

Analysts note that the disparity between strong revenue growth and muted profit margins creates both a buying opportunity and risk, especially if an economic slowdown curtails advertising spend while the high cost base remains.