Meta Platforms Inc.Earnings miss and increased capex guidance overshadowed strong revenue growth, leading to stock drop.

Meta Platforms shares fell for the second straight quarter after the company reported earnings, as investors focused on increased capital expenditure guidance and a headline earnings miss. Revenue surged 28% year over year to $60.8 billion, but reported earnings per share of $6.18 included $2.4 billion in legal costs and nearly $1.2 billion in severance charges; excluding those items, adjusted EPS would have been $7.35, beating analyst estimates. The company raised the lower end of its 2026 capex forecast to a range of $130 billion to $145 billion, up from $125 billion to $145 billion previously, and indicated plans to maximize capacity this year and next, suggesting further spending increases. Advertising revenue climbed 27% to $59.4 billion, driven by a 14% rise in ad impressions and a 12% increase in average ad price, while Reality Labs posted a $4.6 billion operating loss. Following the sell-off, the stock trades at a forward price-to-earnings ratio of just above 14 based on 2027 analyst estimates.
Meta Platforms Inc.Earnings miss and increased capex guidance overshadowed strong revenue growth, leading to stock drop.