Record Quarter for Meta, but Investors Fear Losses in the Metaverse
Meta's financial results for the first quarter of 2026 paint a picture of impressive growth, but overshadowed by a spending gap that is starting to frighten Wall Street. The Menlo Park giant closed the period with revenues of $56.31 billion, marking a 33% increase compared to the previous year. Net income reached $26.77 billion, a leap of 61% that, however, conceals a fundamental technical detail: the figure includes a one-time tax benefit of $8.03 billion related to the Corporate Alternative Minimum Tax and the capitalization of research and development costs in the United States. Without this relief, earnings per share (EPS) would have been $3.13 lower than the declared $10.44.
Meta Q1 2026: Superintelligence Comes at a High Cost and Investors Tremble Despite the strategic shift towards artificial intelligence, the Reality Labs division continues to drain resources with almost scientific regularity. In the first quarter of 2026, the unit responsible for AR/VR hardware and software recorded an operating loss of $4.03 billion on revenues of just $402 million. This dynamic has become established: from 2021 to today, Meta has lost a total of $83.5 billion in its attempt to build the metaverse, maintaining a quarterly loss average hovering around $4 billion.
The real news that shook the market, causing the stock to drop over 5% in after-hours trading, concerns the spending forecasts for the entire 2026. Mark Zuckerberg raised the bar for CapEx (Capital Expenditure) to a range between $125 and $145 billion, significantly surpassing previous estimates, which capped at $135 billion. This surge in infrastructure costs is mainly driven by rising component prices, with memory components specifically weighing on the budget, and the need to strengthen data centers to support future computing capacity.
Zuckerberg justified these investments by citing the launch of the first model coming from the new Meta Superintelligence Labs (identified in some analyses as Muse Spark), emphasizing that the company is focused on delivering personal superintelligence to billions of people. To achieve this goal, Meta has conducted a massive recruiting campaign, poaching over 50 senior researchers from major competitors.
On the operational front, the “Family of Apps” (Facebook, Instagram, WhatsApp) is performing well with 3.56 billion daily active users, a 4% year-over-year increase, despite slight quarterly downturns caused by access restrictions in Russia and network disruptions in Iran. Advertising efficiency has improved, with a 19% increase in impressions and a 12% increase in the average price per ad.
However, the lack of long-term visibility concerns analysts. During the call with investors, CFO Susan Li admitted that planning for 2027 is still in a dynamic phase and that the company has systematically underestimated the computing power requirements necessary for its AI projects. This uncertainty, coupled with rising costs and pending regulatory risks in the United States and Europe (particularly regarding child protection issues), has cooled enthusiasm for a quarterly report that appeared to be unprecedentedly successful.