Key insights
- Meta reported strong Q1 earnings with revenue and EPS beats, but the stock is down in after-hours trading due to increased AI spending guidance. While the author believes the market's reaction is overdone and sees a long-term opportunity, the increased capital expenditure guidance for AI infrastructure is pressuring the stock. This could signal a broader trend of increased AI investment across the tech sector, potentially impacting near-term profitability.
META just released its Q1 results after the market close:
- Revenue: $56.3 billion (+31% YoY) → Beat * EPS: $10.44 → Strong Beat * 2026 CapEx Guidance: Raised to $125-145 billion (significantly higher than expected)
The stock is down -5% to -6% in after-hours trading. Investors seem worried about the massive AI costs.
Honestly, I think the market’s reaction is overdone. META delivered exceptional advertising growth (+31%), proving its core business remains extremely strong and profitable. Yes, the AI expenses are huge, but they’re strategic: Llama, the MTIA chip, and the ambition to lead open-source AI. It may pressure margins in the short term, but long-term I believe this positions META as one of the big winners of the AI era.
For me, this post-earnings dip looks more like an opportunity than a structural problem.
I took a solid short position with Bitget leverage. But honestly, I think META remains solid.
Now my eyes are turning to the upcoming results from GOOGL, AMZN, and MSFT.
Curious to hear your thoughts on META next.