Wall Street has been arguing about one number all year: $145 billion.
That’s how much Meta Platforms guided for in capital expenditures in 2026, up from an earlier forecast of $115 to $135 billion. When the number landed in late April, the stock dropped. Investors saw a company writing enormous checks without an obvious near-term payoff.
Here’s the thing. The underlying business never stopped growing.
Q1 2026: A Quarter Worth Reading Twice
Meta’s first-quarter revenue came in at $56.31 billion, up 33% year over year. Ad impressions rose 19%. Price per ad climbed 12%. Operating income grew more than 30%. That’s not a business under pressure. That’s a business firing on all cylinders while management writes checks for what comes next.
The stock trades below its 52-week high of $796.25.
Slight tangent, but it matters: Meta has now posted multiple consecutive EPS beats. The forward P/E sits near 20. For a business compounding revenue at this rate, that’s not an expensive multiple. It’s actually on the cheaper end of what you’d expect from a company this size growing this fast.
The Cloud Pivot Nobody Expected
This is where it gets interesting. In early July, reports emerged that Meta is developing a cloud infrastructure business to sell access to AI computing power (and potentially models) to outside customers. The stock jumped sharply on the news.
Think about what that means. The same $145 billion in capex that spooked investors in April suddenly has a potential revenue side. Meta wouldn’t just be building infrastructure for its own apps. It could be renting capacity to compete with Amazon Web Services and Microsoft Azure.
Analysts at Wolfe Research flagged the development could push 2027 capex even higher — potentially toward $200 billion — but the strategic logic is hard to dismiss. Meta is sitting on one of the largest private AI compute buildouts on earth. Monetizing that capacity is a rational next step.
Last week, Meta released Muse Image, a new AI model for creators and advertisers. Two days later, it unveiled Muse Spark 1.1, targeting agentic and coding workloads.
What the Numbers Actually Say
Q2 2026 revenue guidance is $58 to $61 billion. Meta’s AI ad tools — specifically Advantage+ — are improving advertiser return on ad spend. Business AI weekly conversations rose from 1 million to 10 million at the start of 2026. The Value Optimization Suite crossed a $20 billion annual run rate.
The bear case is real. Reality Labs posted about a $4.0 billion operating loss in Q1. Free cash flow fell sharply in 2025 as capex ramped. Regulatory risk in the EU and ongoing U.S. youth-related litigation are genuine overhangs. This isn’t a clean story.
But the bull case is also real: a 33% revenue grower trading at roughly 20x forward earnings, with a new cloud business potentially in the works, and earnings on July 29 that could reset the whole conversation.
The capex fear may be exactly the opportunity.
