Meta Raises AI Spending as First-Quarter Revenue Hits $56.3 Billion

Meta Platforms Inc. reported first-quarter 2026 revenue of $56.31 billion, a 33% annual increase that exceeded analyst expectations. Net income rose 61% year-over-year to $26.77 billion. Despite these gains, the company's stock fell by as much as 10% in subsequent trading as investors reacted to a spike in projected capital expenditures and a rare decline in daily active users, which dropped to 3.56 billion due to internet disruptions in Iran and Russia.

To fund its pursuit of superintelligence and agentic AI, Meta raised its 2026 capital expenditure forecast to a range of $125 billion to $145 billion. CEO Mark Zuckerberg highlighted the release of the first model from Meta Superintelligence Labs and detailed a strategy to build compute efficiency through custom silicon developed with Broadcom and AMD. To offset these escalating costs, the company announced a 10% workforce reduction affecting approximately 8,000 employees starting May 20.

The company continues to face significant financial and regulatory headwinds. Its Reality Labs division reported a $4.03 billion operating loss for the quarter, contributing to over $80 billion in total losses since 2020. Additionally, the government of China ordered Meta to unwind its $2 billion acquisition of the AI startup Manus. In the U.S. and EU, the company faces ongoing legal challenges regarding youth safety and social media addiction.