Meta Platforms saw its stock decline after raising its 2026 capital investment guidance and warning of increasing legal and regulatory risks related to child safety.
The parent company of Facebook and Instagram now anticipates capital expenditures between $125 billion and $145 billion, up from the previous projection of $115 billion to $135 billion. This increase is driven by ongoing investments in artificial intelligence infrastructure.
Meta reported first-quarter revenue of $56.31 billion, surpassing analysts' expectations of $55.45 billion. The company forecasts second-quarter revenue in the range of $58 billion to $61 billion, largely in line with market estimates.
However, investors are concerned about rising costs and heightened legal scrutiny. Meta indicated that lawsuits and regulatory actions involving minors could have a significantly adverse impact on profitability.
The company also announced plans for layoffs in May as it restructures teams around artificial intelligence initiatives. It reported a quarterly decline in daily active users for the first time, with a 4% year-over-year increase to 3.56 billion.
Meta's investors will be watching closely to see whether the company can strike an appropriate balance between AI spending, legal challenges, and operational discipline.
Comments