Meta Platforms stock today crashes 10%, wiping out $170 billion market cap - why AI spending fears is overshadowing strong earnings

Meta stock crash after earnings: Meta Platforms stock slid sharply on Thursday, dropping more than 10% in early trading and putting it on track for its biggest daily loss since October 2025. The sell-off wiped out around $170 billion in market value, even though the company delivered better-than-expected quarterly results, as per The Kobeissi Letter.

Meta Platforms Stock Crashes After Q1 Earnings Beat

Meta reported first-quarter earnings per share of $10.44 on revenue of $56.3 billion, beating Wall Street estimates of $8.15 EPS and $55.5 billion in revenue. However, excluding an $8 billion one-time tax benefit, earnings would have been $7.31 per share, softening the headline beat, as per a Yahoo Finance report.

What Triggered Meta's $170 Billion Market Cap Wipeout

The bigger issue for investors was not the past quarter, but the company’s future spending plans. Meta raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, up from its earlier outlook of $115 billion to $135 billion. The increase reflects higher component costs and additional data center investments tied to AI.

While overall expenses are expected to stay in the range of $162 billion to $169 billion, the jump in AI-related spending raised concerns about how quickly those investments will pay off.

Meta's Revenue Outlook and Guidance: What Comes Next

Meta’s outlook for the current quarter also added to the cautious sentiment, with revenue expected between $58 billion and $61 billion.

User Growth Trends Across Meta’s Platforms

On the user front, daily active users across Meta’s platforms grew 4% year over year to 3.56 billion, though this was slightly lower than the previous quarter’s 3.58 billion, impacted by internet disruptions in Iran and WhatsApp restrictions in Russia, as per the Yahoo Finance report.

Advertising Business Still Shows Strength

Advertising performance remained strong, with ad impressions rising 19% and the average price per ad increasing 12%, both showing acceleration from the previous quarter.

Cost Cutting and Layoffs: Meta’s Efficiency Push

However, Meta continues to focus on efficiency. The company recently announced plans to cut 8,000 jobs, or about 10% of its workforce, and remove 6,000 open roles as it looks to offset rising investments, as per the report.

FAQs

Why did Meta stock fall despite strong earnings?
Because investors are worried about the company’s rising AI spending and future costs.

What is Meta’s new AI spending outlook?
Capex is expected to reach $125 billion to $145 billion in 2026.