Meta AI Capex (Up 7%) Is a Bad Surprise -- Could This Be the Next Metaverse?

3 weeks ago 26

Ben Gran, The Motley Fool

Mon, May 4, 2026 astatine 7:43 AM CDT 4 min read

Meta Platforms (NASDAQ: META) reported net connected Wednesday, and the quality didn't spell implicit good with investors. The institution reported immoderate affirmative results, similar a 33% year-over-year summation successful quarterly gross and a 12% year-over-year summation successful mean terms per ad.

But determination was atrocious quality astir costs. The company's ambitions to beryllium a person successful artificial quality (AI) are getting much expensive. Meta banal dropped 8.6% connected Thursday, the time aft the net report. The company's shares are down 7% twelvemonth to day and person underperformed the tech-heavy Nasdaq-100 scale and the S&P 500 scale for the past year. Investors aren't buying this company's AI story.

Will AI make the world's archetypal trillionaire? Our squad conscionable released a study connected a little-known company, called an "Indispensable Monopoly," providing the captious exertion Nvidia and Intel some need.

Continue »

Let's instrumentality a person look astatine what Meta Platforms' AI spending mightiness mean for the stock terms – and if this AI banal is inactive worthy believing in.

Meta: raising superior expenditures by (at least) 7% successful 2026

According to its Wednesday net announcement, Meta Platforms expects $125 cardinal to $145 cardinal successful superior expenditures during 2026. That's a important summation from the company's anterior estimated scope of $115 cardinal to $135 billion. If Meta spends astatine the higher extremity of that range, capex volition beryllium 7% much than erstwhile estimates.

A acrophobic capitalist reacts to atrocious quality astir Meta AI capex.

Are investors overreacting to Meta's quality astir capex? The institution says that the higher spending scope is owed to "higher constituent pricing" and "additional information halfway costs to enactment aboriginal twelvemonth capacity." Meta Platforms is getting deed by the aforesaid AI-driven representation shortage that has driven up the costs of user electronics.

And Meta's not the lone AI institution with higher capex this year. Alphabet also reported net connected Wednesday, and besides announced higher capex guidance for 2026 -- $180 cardinal to $190 billion, up from $175 cardinal to $185 billion. But investors look much assured that Alphabet is spending wisely connected AI, due to the fact that the institution is making wealth from AI unreality services and industry-leading AI products similar Google Gemini.

But dissimilar Alphabet oregon Amazon, Meta doesn't person arsenic wide of a communicative for however it makes wealth from AI. What precisely is Meta buying with each those billions of dollars?

AI revolution, oregon failed experiment?

Investors are starting to person superior doubts astir whether Meta's AI investments volition wage disconnected -- oregon if this is different "Metaverse"-style experimentation that failed to present ROI. Meta changed its sanction from "Facebook" and spent $80 cardinal connected the Metaverse, and it didn't pb to immoderate important gains for investors.

Read Entire Article