Meta Platforms' stock has fallen about 29% from the high near $795 it set last August to about $565, even though the company is still worth around $1.4 trillion. The slide has come while the business keeps accelerating, with first-quarter 2026 revenue rising 33% year over year to $56.3 billion.
That gap is why Meta Stock is drawing fresh attention now. Revenue growth sped up from 24% in the fourth quarter of 2025, ads served across Facebook, Instagram and the company's other apps rose 19%, and the average price per ad climbed 12%. In March, 3.56 billion people used at least one of Meta's apps every day, up 4% from a year earlier, showing the core business is still pulling in more users and more dollars at the same time.
The profit picture was strong too. Income from operations rose 30% to $22.9 billion, and the operating margin held at 41%. By the usual measures, this is not a business losing its way. It is growing faster, monetizing better and holding margins steady while its share price moves in the opposite direction.
The reason is the spending plan hanging over the company. Meta now expects to spend $125 billion to $145 billion on capital expenditures in 2026, up from a prior forecast of $115 billion to $135 billion and far above the roughly $39 billion it spent in 2024 and about $72 billion in 2025. Susan Li said on the first-quarter earnings call that the company has continued to underestimate its compute needs even as it has been ramping capacity significantly. Investors are hearing that as a warning that the bill for AI may keep rising before the payoff is visible.
That concern is not only about this year. Capital spending eventually turns into depreciation, so a larger 2026 buildout will flow back through the income statement later and weigh on reported earnings for years after the cash leaves the door. Meta's total expenses for 2026 are guided at $162 billion to $169 billion, and if the spending keeps climbing without a matching jump in returns, the market will keep pressing the stock even if the top line stays hot.
Valuation leaves some room for the market's caution. Meta's forward price-to-earnings ratio sits at about 17, but that number is muddied by one-time tax items that distorted reported earnings over the past year. Stripping out that noise would make the multiple look lower and would leave the stock looking less expensive than the headline figure suggests. The harder question is whether the company can turn its heavier AI buildout into enough growth to justify the spending before depreciation starts to pile up.
