What Happened?
Shares of social network operator Meta Platforms (NASDAQ: META) fell 8.1% in the afternoon session after the company's forecast for a significant increase in spending overshadowed its strong first-quarter results.
Despite reporting a 33.1% year-on-year jump in revenue and beating earnings per share estimates by over 56%, investors focused on the company's rising costs. Meta raised its full-year capital expenditure guidance to $135 billion, up from a previous forecast of $125 billion. The scale of this investment raised concerns among investors about future profitability. Adding to the worries, the company's Daily Active People, a key user engagement metric, missed expectations.
The shares closed the day at $611.83, down 9.2% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Meta? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Meta’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 2.7% on the news that the company announced a multibillion-dollar partnership with Amazon to scale its "agentic AI" capabilities. Under the multiyear deal, Meta will deploy tens of millions of AWS Graviton CPU cores to power the real-time reasoning and code-generation tasks behind its next-generation AI agents. This move makes Meta one of Amazon's largest silicon customers and signals a shift toward more energy-efficient infrastructure, addressing investor concerns that massive AI capital expenditures might overwhelm the company's operating margins. The Amazon agreement complements Meta's "Efficiency 2.0" initiative, which recently included a 10% workforce reduction to prioritize high-growth AI projects. Analysts believe the deal secures the compute capacity needed to sustain the 30% ad revenue growth expected in the upcoming April 29 earnings report. By pairing aggressive cost-cutting with high-impact infrastructure partnerships, Meta has shifted the market narrative toward disciplined scaling, driving shares upward as confidence grows in its long-term AI monetization strategy.
Meta is down 5.6% since the beginning of the year, and at $613.83 per share, it is trading 22.3% below its 52-week high of $790 from August 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $1,888.
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