Meta Platforms (META) shares fell roughly 7% in after-hours trading Wednesday, even though the company delivered a beat on both its top and bottom lines. Despite strong results, investors seem to be concerned about a higher CapEx outlook and a slight dip in user growth.
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For context, Meta reported EPS of $10.44, which came in a staggering 58% ahead of Wall Street expectations. Revenue also climbed 33% year-over-year to $56.3 billion. However, the market’s reaction shows investor concern around long-term spending, especially as the company leans deeper into AI.
Rising AI Spending and User Trends Raise Questions
The biggest concern was Meta’s rising capital expenditure. The company lifted its full-year CapEx forecast to $125 billion–$145 billion, up from $115 billion–$135 billion earlier. This sharp increase is aimed at building AI infrastructure and developing personal AI tools for users at scale.
User trends were another area investors watched closely. While daily active users across Meta’s apps rose 4% year-over-year to 3.56 billion, there was a slight sequential slowdown in some regions.
Despite these hurdles, advertising business remained strong, with revenue growth picking up from the previous quarter.
What to Watch Next for META Stock?
Looking ahead, the key question is whether Meta’s AI spending will deliver returns. CEO Mark Zuckerberg continues to push toward “personal superintelligence,” but investors want more clarity on when these investments will start generating steady profits.
For Q2, Meta guided revenue between $58 billion and $61 billion, roughly in line with expectations. The focus now is whether AI-driven gains in ad targeting can support this level of spending, especially as costs are rising faster than revenue.
Top Analysts Views on META Stock Post Q1 Earnings
Following Meta’s Q1 2026 earnings report, Top Evercore analyst Mark Mahaney reiterated his Outperform rating and raised his price target to $900, up from $850. He called the quarter a “beat & bracket,” noting that operating income of $22.9 billion came in 19% above estimates with a strong 41% margin. He also pointed out that revenue growth accelerated, showing the core business remains strong despite higher spending.
Likewise, another 5-star analyst Ralph Schackart of William Blair maintained a bullish view on Meta, pointing to strong video engagement across Instagram and Facebook and growing adoption of newer ad tools. He also highlighted Meta’s rapid progress in AI, noting that its investments are already improving user engagement and advertiser returns.
While CapEx is rising, Schackart sees it as a strategic move to strengthen Meta’s long-term AI and infrastructure advantage.
Is META Stock a Buy?
The stock of Meta Platforms has a consensus Strong Buy rating among 33 Wall Street analysts. That rating is based on 28 Buy and five Hold recommendations issued in the last three months. The average META price target of $852.64 implies 27% upside from current levels.
