Meta Increases AI Spending Plan to Up to $145 Billion, Drawing Investor Skepticism
Meta Platforms (NASDAQ: META) has raised its capital expenditure forecast for 2026 to between $125 billion and $145 billion, with the increase largely attributed to investments in artificial intelligence infrastructure. The company is rolling out custom chips designed in collaboration with Broadcom as part of efforts to optimize AI spending efficiency. Despite generating significant free cash flow—$12.4 billion in Q1 2026—the stock has fallen by over 3.4% on investor concerns about the heavy financial commitment. CEO Mark Zuckerberg and CFO Susan Li emphasized that compute power is essential for delivering innovative products and supporting internal development processes at Meta. The company's full-year capital spending outlook remains unchanged, but there are growing tensions as it prepares to report Q2 results. If Meta raises its spending range again, the market reaction could be negative. Meta’s revenue grew 22% in 2025 to around $201 billion and currently trades at a relatively modest earnings multiple of about 22 times. Analysts are watching for signs that AI investments will translate into advertising growth rather than just increased costs.
Topics: AI Broadcom Capital Expenditures Meta Platforms Nvidia