San Francisco – Meta Platforms shares slid after the tech giant raised its spending outlook for 2026, reigniting fears that the historic levels of investment it’s making to catch up in the artificial intelligence race won’t pay off.
The parent of Facebook and WhatsApp projected full-year capital expenditures between US$125 billion (S$160 billion) and US$145 billion, far exceeding analysts’ estimates and marking a roughly 7.4 per cent increase from what the company had previously projected.
The company is dealing with “higher component pricing” and additional data centre costs, chief financial officer Susan Li said at a results briefing on April 29.
Meta chief executive officer Mark Zuckerberg has signalled that his company will spend hundreds of billions of dollars on AI infrastructure before the end of the decade. And that was before a memory chip shortage triggered a surge in prices. The firm has announced billion-dollar deals with Nvidia, Advanced Micro Devices and Broadcom for chips and other hardware and is building several massive data centres to power its efforts.
Meta shares fell 7 per cent in after-hours trading on April 29. They had risen 1.4 per cent in 2026 before the day.
Meta wasn’t the only major technology company raising spending. Amazon.com said on April 29 that it dropped more than anticipated on expanding data centre capacity in the first quarter. Alphabet’s Google raised its capital expenditure projections to as much as US$190 billion for 2026. But Google still managed to spur a rally after beating on quarterly revenue and profit, signalling confidence in the company’s AI bets.
Meta reported US$56.3 billion in first-quarter sales, beating Wall Street’s estimate of US$55.51 billion. It projected sales of US$58 billion to US$61 billion for this quarter, roughly in line with expectations.
To offset its AI spending, Meta has recently imposed a number of cost-cutting measures. Last week, it alerted staff in an internal memo that it would be cutting roughly 8,000 jobs and wouldn’t be filling 6,000 open roles. The company had already carried out other, more limited cuts earlier tin 2026 that hit its hardware division Reality Labs, among other teams.
Evercore ISI estimated the May layoffs will save the company about US$3 billion annually, and that companies will rely more on AI agents to help do tasks that once required human employees. Still, US$3 billion is a small sliver of Meta’s total AI investments. BLOOMBERG
