Why Meta Stock is Falling After Hours Today (April 29, 2026)

Meta Platforms (META) delivered a powerful Q1 earnings report today, beating Wall Street estimates for both revenue and profit. However, shares tumbled by more than 6% in after-hours trading as investors reacted to one specific number: the massive jump in projected spending.

1. The $10 Billion Question: AI CapEx Hike

The single biggest reason for the sell-off is Meta's revised capital expenditure (CapEx) guidance. The company now expects to spend between $125 billion and $145 billion in 2026, a significant increase from its previous forecast of $115 billion to $135 billion.

Management pointed to two main factors for this increase:
* Higher Component Pricing: The cost of the high-end chips required for AI training is rising.
* Data Center Infrastructure: Accelerating the build-out for the Meta Superintelligence Labs and new AI models like "Muse Spark."

2. The "Asterisk" on Earnings

While Meta reported a staggering EPS of $10.44, the headline number is somewhat misleading. The bottom line was inflated by an $8.03 billion one-time tax benefit.

When you strip that out, the adjusted EPS sits closer to $7.31. While this is still a solid beat against the $6.82 analyst consensus, it wasn't the "blowout" performance some algorithmic traders initially priced in, leading to a "sell the news" reaction as the details emerged.

3. Reality Labs and Cash Flow Strain

The "Metaverse" and hardware division, Reality Labs, continues to be a heavy weight on the balance sheet. In Q1 alone, the division recorded an operating loss of over $4 billion on just $402 million in sales.

With CapEx nearly doubling compared to 2025 levels, investors are concerned about the "Capex-to-Revenue" ratio. There is growing skepticism about when this massive investment in AI and hardware will translate into concrete revenue streams beyond traditional digital advertising.

4. Mixed User Metrics

Meta's Family Daily Active People (DAP) reached 3.56 billion, a 4% increase year-over-year. However, this figure came in slightly below the Wall Street projection of 3.62 billion. Traders often view even slight misses in user growth as a sign of platform saturation, especially when paired with soaring infrastructure costs.

Summary: A "Show Me" Story

Meta's core advertising engine is healthier than ever, with revenue growing 33% year-over-year. But for now, the market is laser-focused on the cost of Mark Zuckerberg's AI ambitions. Until Meta can prove that the $145 billion spending spree will widen its competitive moat without permanently crippling its margins, the stock may remain under pressure.