Shares in Meta Platforms fell sharply in extended trading on Wednesday after the tech giant raised its annual capital spending forecast by billions of dollars.
The parent company of Facebook, Instagram and WhatsApp said its 2026 capital expenditure will be between $125 billion and $145 billion, up from a previous forecast of $115 billion to $135 billion. The increase, largely aimed at AI processors and data centres, unsettled investors, sending the stock down more than 6 per cent in after-hours trading.
The market reaction was also driven by a cautious legal outlook. Meta warned that ongoing regulatory pressure in both the European Union and the U.S. "could significantly impact our business and financial results," amid continued criticism over children’s safety and mental health on its platforms.
"We continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the US, which may ultimately result in a material loss," the company said in its financial disclosures.
Meta is facing increasing legislation aimed at restricting teen access to social media worldwide. It is also dealing with thousands of active legal cases brought by individuals, municipalities, states and school districts. These cases allege the company designed addictive algorithms that harm children.
Several key cases are due in the coming months, including the second phase of a major trial in New Mexico and a case in California expected to test legal arguments central to nearly 2,000 similar lawsuits filed by school districts across the U.S.
Adding to concerns, Meta reported its first quarterly decline in Daily Active People (DAP) since introducing the metric across its apps. The company attributed the drop to internet disruptions in Iran and new restrictions on WhatsApp in Russia.
Despite this, daily active users rose 4 per cent year-on-year to 3.56 billion in the first quarter. Matt Britzman, an equity analyst at Hargreaves Lansdown, said the market reaction to increased spending may be overdone, noting that higher forecasts reflect rising hardware costs rather than a major shift in strategy.
The results come weeks after Reuters reported Meta’s plans for significant layoffs as part of a broader AI-driven restructuring. Chief executive Mark Zuckerberg is pushing to integrate AI across the business, reshaping its workforce.
Sources indicate further job cuts are planned for the second half of the year.
Reuters also reported that Meta is installing tracking software on computers used by its U.S.-based employees. The software captures mouse movements, clicks and keystrokes to help train AI models.
During a conference call, chief financial officer Susan Li confirmed that the next phase of job cuts will begin in May.
"We don't really know what the optimal size of a company will be in the future," Li told analysts. "I think there's a lot of change right now, with AI capabilities advancing rapidly."
Zuckerberg defended the strategy, saying small AI-supported teams can now produce work that previously required much larger groups. He said the company aims to build "the next evolution of our company around these people," focusing on infrastructure investment, higher rewards for top performers and leaner teams.
Meta said its global workforce stood at 77,986 at the end of March, slightly up from a year earlier but down from 78,865 in December. The company maintained its forecast for 2026 operating expenses, despite higher capital spending, citing expected savings from job cuts.
Meta reported first-quarter revenue of $56.31 billion, beating analysts’ estimates of $55.45 billion. It expects second-quarter revenue of between $58 billion and $61 billion, broadly in line with forecasts.
However, these results were overshadowed by stronger performance from competitors, including Alphabet, Google’s parent company, which exceeded expectations for both revenue and profit.
"Meta’s results met expectations, but failed to impress investors, especially in the context of much stronger results from Google," said Gil Luria, managing director at D.A. Davidson.
His comments reflect growing pressure on Zuckerberg to demonstrate that the company’s heavy investment in AI will deliver long-term returns.
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CSTO Secretary General Taalatbek Masadykov has inspected security along the Tajikistan-Afghanistan border as the regional bloc continues a long-term programme to strengthen one of Central Asia's most strategically important frontiers.
Chinese manufacturers are working at full capacity as two very different global pressures fuel demand. Europe's record heatwave has triggered a rush for air conditioners, while U.S. retailers are accelerating imports to beat looming tariff increases.
Three people died from suffocation after thousands of fans crowded the streets of Mexico City following Mexico’s victory at the 2026 FIFA World Cup, city health officials said early on Wednesday (1 July).
Russia and Ukraine have reported fresh military successes as both sides intensify efforts to weaken each other's logistics, energy infrastructure and supply networks, extending the conflict far beyond the front line.
Iranian and U.S. negotiating teams were due in Doha this week, but Iran said on Monday no meeting had been scheduled as weekend missile fire from both sides tested the interim ceasefire to end the four-month-old war.
The U.S. and Iran have agreed to 'stand down' and resume technical talks, allowing vessels allowed to move freely under the interim peace deal, a U.S. official said.
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Mexico ended their 40-year wait for a World Cup knockout win, while Erling Haaland sent Norway through and Kylian Mbappé fired France into the last 16.
Iran has ruled out direct talks with senior U.S. envoys in the Gulf, saying any contact will take place through Qatari mediators. Meanwhile, Steve Witkoff and Jared Kushner have met in Doha with Qatar's PM Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani.
Chinese manufacturers are working at full capacity as two very different global pressures fuel demand. Europe's record heatwave has triggered a rush for air conditioners, while U.S. retailers are accelerating imports to beat looming tariff increases.
Russia and Ukraine have reported fresh military successes as both sides intensify efforts to weaken each other's logistics, energy infrastructure and supply networks, extending the conflict far beyond the front line.
The European Union has introduced new fees on low-value e-commerce imports from China, marking its first major step to tackle what it says is unfair competition from online retailers such as Shein, Temu and AliExpress.
Children are adopting artificial intelligence at an unprecedented rate but safeguards designed to keep them safe are failing to keep pace, UNICEF has warned, saying a generation is effectively growing up inside a global experiment.
Türkiye's Foreign Minister Hakan Fidan held talks in Ankara on Tuesday with several senior European Union officials as diplomatic engagement between Türkiye and the bloc continues ahead of next week's NATO summit.
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