Meta's Q1 Earnings Report to Spotlight Spending as Capital Expenditures Nearly Double Year-Over-Year

Meta Platforms is scheduled to release its first-quarter financial results after the market closes on Wednesday. Investors are expected to focus on the company's substantial investments in artificial intelligence and recent workforce reductions implemented as part of its strategic pivot for the AI era.

According to Bloomberg estimates, Meta is projected to report adjusted earnings per share of $8.15 and revenue of $55.5 billion for the first quarter. In January, the company provided revenue guidance for the quarter in the range of $53.5 billion to $56.5 billion.

Year-to-date, Meta's stock has gained approximately 2%, compared to a 6% rise in the Nasdaq Composite Index over the same period.

In the first quarter of last year, Meta reported earnings per share of $6.43 and revenue of $42.3 billion. At that time, the company anticipated total expenses for 2025 to be between $113 billion and $118 billion, with capital expenditure projections of $64 billion to $72 billion.

By the end of 2025, Meta's actual total expenses reached $117.7 billion, while capital expenditures totaled $72.2 billion.

In January of this year, Meta provided updated guidance for 2026: total annual expenses are forecast to be between $162 billion and $169 billion, with capital expenditures significantly increasing to a range of $115 billion to $135 billion.

The extent of updates to these expense and capital expenditure forecasts in Wednesday's earnings report will be a key area of investor focus.

Meta, along with Microsoft, Amazon, and Alphabet, forms the quartet of major technology giants driving the current AI investment cycle. In January, these four companies collectively committed to AI-related expenditures exceeding $650 billion for 2026.

Last week, Meta announced a new round of job cuts, eliminating 8,000 positions (approximately 10% of its workforce) and removing 6,000 open job listings.

In an internal memo, Meta stated that this workforce reduction is aimed at continuously improving operational efficiency and mitigating cost pressures resulting from significant strategic investments.