Meta's 10% Plunge: Investors Want Clearer AI Payoff

Meta Platforms shares dropped 10% in early trading Wednesday, even after the company reported first-quarter revenue of $56.3 billion, beating estimates. The selloff reflects growing investor anxiety over the company's massive AI spending.

Meta raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, up from a prior range of $115 billion to $135 billion. Unlike Alphabet, Amazon, or Microsoft, Meta lacks a cloud computing arm to help offset its infrastructure costs. A rapidly rising bet with an unclear, slow payoff is making investors queasy.

Alphabet also raised its capex forecast, now expecting to spend between $180 billion and $190 billion this year, with plans for another significant increase in 2027.