Meta Increases AI Budget to $145 Billion as Investors Remain Skeptical
Meta Platforms has raised its capital expenditure forecast for 2026 to between $125 billion and $145 billion, with a significant portion allocated toward artificial intelligence infrastructure. This increase reflects the company's growing reliance on compute power to enhance service quality and drive innovation in AI models. Despite strong first-quarter free cash flow of $12.4 billion, Meta’s stock has fallen 3.4% recently amid investor skepticism about its spending plans. CEO Mark Zuckerberg emphasized continued investment in custom chips developed with Broadcom as part of the company's strategy to optimize AI expenditures. CFO Susan Li highlighted how compute resources are becoming essential for employee productivity and product development. The market is watching closely ahead of Meta’s July 29 earnings report, particularly whether it will raise its spending range again or show signs that AI investments are translating into advertising growth. Meta reported a full-year capital expenditure outlook unchanged at $162 billion to $169 billion while achieving strong revenue growth in 2025. The company’s stock currently trades at around 22 times earnings, suggesting investors may still be willing to tolerate higher spending if the business continues growing.
Topics: AI infrastructure Capital expenditures Earnings call commentary