BREAKINGVIEWS-Meta's fall shows punters crave clearer AI payoff
FILE PHOTO: The logo of Meta is seen during the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris, France, June 12, 2025. REUTERS/Benoit Tessier/File Photo
NEW YORK, April 30 (Reuters Breakingviews) - Shares fell 10 per cent despite strong revenue growth and signs technology is boosting ad sales. The issue is funding: unlike Alphabet, Amazon or Microsoft, there’s no cloud arm to cushion infrastructure spending. A rapidly rising bet with an unclear, slow payoff makes investors queasy.
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CONTEXT NEWS
Meta Platforms raised its annual capital spending forecast when it reported first quarter results on April 29. The company now projects 2026 capital expenditure to be between $125 billion and $145 billion, compared with its prior forecast of $115 billion to $135 billion.
Meta reported first-quarter revenue of $56.3 billion, beating the LSEG-compiled analysts' average estimate of $55.5 billion.
Separately, Alphabet also raised this year's capital expenditure forecast when it reported quarterly earnings on the same date. The search giant now expects to spend between $180 billion and $190 billion, a $5 billion increase from the company's estimate last quarter. Alphabet said it plans another significant increase in 2027.
Shares of Meta dropped 10 per cent in early trading on April 30.
(Editing by Robert Cyran; Production by Pranav Kiran)
