Meta Platforms (META) stock dropped sharply on April 30, 2026—roughly 9-10% in its largest single-day percentage decline since October 2025. Meta reported solid Q1 2026 earnings after the close on April 29: Revenue reached about $56.3 billion beat estimates.
EPS came in strong around $10+ with growth. Advertising business performed well, with higher impressions and pricing. However, the stock sold off aggressively the next day because Meta raised its 2026 capital expenditure guidance to $125–145 billion from a prior $115–135 billion range.
This increase was driven by higher component prices, more data centers, and aggressive AI infrastructure buildout. The market erased roughly $170–175 billion in market value in one session, with shares closing near $607–612 down from around $669–672 pre-earnings.
Investors focused on these concerns: AI spending without clear, immediate monetization: Meta lacks a large cloud business unlike Amazon, Google, or Microsoft to offset or demonstrate returns on these massive investments. CEO Mark Zuckerberg and the CFO noted conviction in the AI strategy but acknowledged uncertainty around exact scaling and ROI for some products.
Reality Labs continued to lose billions. Alphabet also raised capex but saw its stock rise significantly, partly because its cloud segment is booming and provides a clearer path for AI returns. Modest user growth miss partly due to external issues like internet disruptions, upcoming layoffs ~10% workforce reduction in May and ongoing legal and regulatory risks around youth safety and social media addiction lawsuits.
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This echoed the October 2025 reaction, when Meta also faced a big drop around 11% on higher AI spend guidance. META had been trading well below its August 2025 all-time high ~$796. Drops of 9%+ are rare for Meta, only a handful since its IPO. Historical data suggests strong average forward returns after such events though past performance isn’t a guarantee.
The reaction highlights ongoing investor debate: Is Meta’s heavy AI bet; hundreds of billions cumulatively a visionary move that will pay off in advertising efficiency, AI agents, or new products—or is it repeating past over-investment risks like the metaverse.
The core ad business remains robust, but the market is pricing in skepticism about the cost and timeline of AI returns versus near-term margin pressure and free cash flow. Some analysts see it as a potential buying opportunity if Meta can demonstrate progress; others view the elevated capex as a valid reason for caution in a high-valuation stock.
Big Tech earnings seasons often trigger these capex-driven swings—watch for how Meta executes on efficiency and any AI product updates in coming quarters. Meta’s raised 2026 capex guidance to $125–145 billion; up ~$10 billion from prior $115–135 billion reinforces the intense, accelerating AI infrastructure arms race across Big Tech, rather than derailing it.
The ~9% stock drop on April 30, 2026, highlighted investor sensitivity to near-term margin pressure and uncertain ROI timing at companies without strong offsetting cloud revenue streams. However, the broader sector reaction and updated guidance from peers confirm that capex trends are moving higher overall, not lower.
Meta: $125–145B raised; driven by higher memory and component prices + extra data center capacity for AI. Alphabet (Google): $180–190B raised slightly; cloud revenue surged, with strong AI-related growth. Microsoft: ~$190B is well above prior consensus; Q1 capex already up 49% YoY, with demand outstripping supply. Amazon: ~$200B previously guided; AWS benefiting from AI workloads.
Collective total for these four is now tracking $650–725 billion for 2026 — up dramatically from ~$410 billion in 2025 roughly 60–77% YoY growth. Some estimates put hyperscaler AI-related infrastructure spend even higher when including power, networking, and related buildout. Analysts now see the possibility of total AI capex exceeding $1 trillion in 2027 as the buildout continues.