Meta Platforms has raised its annual capital expenditure forecast, signalling a deeper push into artificial intelligence despite mounting legal and regulatory challenges.
Atletico Hold Arsenal 1-1 as Penalties and VAR Drama Shape Semi-Final
The parent company of Facebook and Instagram now expects to spend between $125 billion and $145 billion in 2026, up from its earlier projection of $115 billion to $135 billion. The announcement weighed on investor sentiment, with shares falling more than 6% in extended trading.
Meta warned that increasing scrutiny in the European Union and the United States over youth safety and social media practices could significantly impact its business. The company faces a wave of lawsuits and regulatory actions accusing it of designing addictive platforms harmful to children.
Several major legal battles are expected in the coming months, including high-profile cases in New Mexico and California, which could set precedents for thousands of similar lawsuits across the US.
The company also reported its first-ever quarterly decline in Daily Active People, attributing the drop partly to internet disruptions in Iran and restrictions on WhatsApp access in Russia. Despite this, daily users rose 4% year-on-year to 3.56 billion in the first quarter.
CEO Mark Zuckerberg reiterated the company’s commitment to AI-driven transformation, highlighting how smaller teams equipped with advanced AI tools can deliver results faster. CFO Susan Li confirmed upcoming layoffs as part of restructuring efforts to align with AI integration.
Meta reported first-quarter revenue of $56.31 billion, surpassing expectations, and projected second-quarter revenue between $58 billion and $61 billion.
However, analysts noted that the results were overshadowed by stronger performances from rivals such as Alphabet, raising concerns about Meta’s rising costs without corresponding efficiency gains.
The developments highlight the balancing act Meta faces between investing heavily in future technologies and navigating regulatory pressures and evolving user behavior.
