Story perspectives

Meta Raises 2026 Capex, Shares Plunge 6% After AI Spend

5/2/2026

Summary

Meta Cuts Jobs

Meta reported Q1 revenue $56.3B beating estimates and saw shares fall >6% after raising 2026 capex to $125B-$145B.
CFO Susan Li said it reflects rising component prices and data-center costs for AI infrastructure.
CEO Mark Zuckerberg unveiled the Muse Spark AI model and announced cutting 8,000 jobs while leaving 6,000 positions unfilled to free resources.
Analysts said the spending surge erased $160B-$170B in market value, the biggest one-day decline since October 2025.

Summary

AI Leaders Surge

Alphabet’s Google Cloud unit posted $20 billion in sales for the quarter, surpassing the $18.4 billion forecast and helping the company’s shares climb more than 7% in after-hours trading.
Amazon’s in-house AI chip business reached an annual run-rate of $20 billion, and its AWS cloud division reported 28% year-over-year revenue growth, contributing to a 2.7% rise in the company’s stock in extended trading.
Nvidia’s shares rose 4.43% as the chipmaker posted a 73% quarterly revenue increase, while Micron’s earnings grew even faster, leading analysts to label semiconductor stocks “still cheap” despite high price-to-earnings multiples.
Investors expressed cautious optimism despite heightened AI capex, with Ed Yardeni noting that the “Magnificent 7” are now trading at discounts relative to projected earnings against geopolitical tension over the war with Iran.
Microsoft’s Azure revenue jumped about 39% and paid Copilot seats reached 20 million, yet the company’s free-cash-flow fell by nearly $6 billion to $15.8 billion, prompting mixed reactions in the market.

History

Historical Context

After Nvidia’s GPUs fueled a surge in 2018 thanks to cryptocurrency mining, the same hardware now underpins massive AI data-center builds that pushed Nvidia’s market value past $2 trillion in March 2024. Companies such as Amazon and Meta are repeating the capital-intensive spending pattern, prompting CEOs to tighten budgets amid antitrust probes.

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Meta Cuts Jobs

Meta reported Q1 revenue $56.3B beating estimates and saw shares fall >6% after raising 2026 capex to $125B-$145B.
CFO Susan Li said it reflects rising component prices and data-center costs for AI infrastructure.
CEO Mark Zuckerberg unveiled the Muse Spark AI model and announced cutting 8,000 jobs while leaving 6,000 positions unfilled to free resources.
Analysts said the spending surge erased $160B-$170B in market value, the biggest one-day decline since October 2025.

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