The Spill: Meta’s (META) $145 Billion Bet on Superintelligence

Meta (META) Is Spending Like Its Life Depends on It

By IPO Edge Editorial Staff

Last month, Meta Platforms (META) posted its fastest revenue growth quarter since 2021.

The stock fell anyway.

Revenue jumped 33% to $56.3 billion. Operating margin held at 41%. Net income climbed 61%.

Then management told investors that 2026 capex would land between $125 and $145 billion, up from a prior range of $115 to $135 billion.

Shares dropped roughly 7% after hours.

Search volume from financial pros surged after the print, according to our TrackStar data, with Meta capturing nearly 50% more searches than Alphabet (GOOG).

The question isn’t whether the ad business is healthy. It clearly is.

The question is whether Mark Zuckerberg’s AI spending spree pays off before investors lose patience.

Meta’s Business

Meta owns four of the most-used apps on the planet: Facebook, Instagram, WhatsApp, and Messenger. Roughly 3.56 billion people open at least one of them every day.

The company turns that attention into ad dollars. Ad revenue hit $55.0 billion in Q1, with impressions up 19% and price per ad up 12% year over year.

Meta segments its business into the following areas:

• Family of Apps (99.3% of revenue) – Advertising across Facebook, Instagram, Messenger, WhatsApp, and Threads, plus WhatsApp paid messaging and subscriptions

• Reality Labs (0.7% of revenue) – VR/AR hardware including Quest headsets, Ray-Ban Meta and Oakley AI glasses, software, and content

The headline this quarter was Muse Spark, the first model from Meta Superintelligence Labs.

Zuckerberg called it the start of his push to deliver “personal superintelligence to billions of people.”

Meta also raised its 2026 capex range to $125 to $145 billion. That’s nearly double the $72.2 billion it spent in 2025.

Management cited higher memory pricing and additional data center capacity for future years.

To offset some of the cost, Meta announced it will cut roughly 8,000 employees in May and pull back another 6,000 open roles.

The company is also rolling out more than 1GW of custom silicon developed with Broadcom, alongside AMD chips, to reduce dependence on Nvidia.

Financials

Source: Stock Analysis

Meta’s top line is on fire. Revenue grew 26.2% over the trailing twelve months and 22.0% in 2025.

Gross margin sits at 81.9%, with operating margin at 41.2%. Both are near five-year highs.

Cash from operations hit $32.2 billion in Q1 alone, up from $24.0 billion a year ago.

But capex jumped to $19.8 billion in the quarter.

Free cash flow came in at $12.4 billion, only modestly above the $10.3 billion from the year-ago period.