Meta Platforms Inc. (NASDAQ:META) is ramping up its artificial intelligence (AI) investment plans as executives signal that the company's demand for computing power continues to exceed internal expectations.
AI Infrastructure Push Accelerates Amid Rising Costs
On Wednesday, during the company's first-quarter earnings call, CEO Mark Zuckerberg said the company is increasing its infrastructure capital expenditure forecast for the year, citing higher component costs, particularly in memory pricing.
He added that ongoing internal and industry signals continue to support the company's aggressive investment strategy in AI infrastructure.
CFO Susan Li reinforced that outlook, raising Meta's 2026 capital expenditure forecast, including finance lease payments, to a range of $125 billion to $145 billion, up from the prior outlook of $120 billion to $135 billion.
She attributed the increase to higher component prices and additional data center investments aimed at supporting future capacity needs.
We Continue To Underestimate Compute Needs: Li
Responding to analyst questions about longer-term spending trends, Li acknowledged uncertainty around future capital intensity but emphasized a consistent pattern of rising demand.
"We have continued to underestimate our compute needs even as we have been ramping capacity significantly," Li said, pointing to faster-than-expected advances in AI development and expanding internal use cases.
She added that compute is becoming increasingly central to Meta's business, influencing model quality, product development, and overall organizational productivity.
Flexible But Expanding Investment Strategy
While Meta declined to provide a specific 2027 capital expenditure outlook, Li said the company is maintaining flexibility in its infrastructure planning.
She noted that Meta could adjust spending timelines if capacity exceeds near-term demand, but noted that current investments are designed to support long-term AI growth.
Meta Tops Q1 Earnings Estimates With Strong Revenue Beat
Meta reported first-quarter revenue of $56.31 billion, surpassing Wall Street expectations of $55.45 billion. The company also posted adjusted earnings of $7.31 per share, ahead of the $6.78 per share forecast.
For the second quarter, Meta projects revenue between $58 billion and $61 billion, compared with analyst estimates of $59.50 billion.
Meta Falls On CapEx Surge Despite Strong Revenue Growth Outlook
Meta Platforms shares ended the regular session at $669.12, down 0.33% and slid further in after-hours trading to $622.20, a decline of 7.01%, according to Benzinga Pro.
Noting the decrease in after-hours, Deepwater Asset Management's managing partner Gene Munster called the reaction a "déjà vu" moment similar to what occurred after its September 2025 earnings report.
Munster said Meta's capex is projected to grow 94% this year, compared with Wall Street expectations of 76%
He added that he is "continually surprised" by investor negativity around the spending outlook, arguing that prior data show these investments are delivering results.
Last year, Tiffany Wade of Columbia Threadneedle Investments said Meta appears to be ramping up spending again without providing clear evidence that the investment will generate returns, TipRanks reported.
She also noted a key concern that Meta lacks a major enterprise cloud business that could directly benefit from rising AI demand.
Separately, Stefan Slowinski of BNP Paribas said Meta continues to depend heavily on advertising and has struggled to successfully diversify into new revenue streams.
Benzinga Edge data indicates that Meta ranks in the 88th percentile for Quality, highlighting strong performance in the short and medium term, but showing weaker momentum in long-term trends.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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