Meta Falls 20% Despite 33% Q1 Growth, $135B–$145B Capex Plan
META•Meta stock has declined 20% from its August 2025 peak despite exceptional Q1 results with 33% revenue growth and a 57% earnings beat. The pullback reflects elevated $135–145 billion capex guidance for 2026 rather than fundamental weakness while trading at 22.99x trailing P/E and 17–18x forward 2027 earnings.
1. Q1 Financial Performance
Meta delivered 33% year-over-year revenue growth in Q1 and topped consensus EPS by 57%, driven by robust advertising demand and initial AI monetization efforts.
2. Stock Pullback and Technical Setup
Shares have slid 20% from their August 2025 peak, with the decline spurred by concerns over elevated spending. Technical analysis shows a bullish falling-wedge pattern at key resistance levels pointing to potential upside if sentiment turns positive.
3. Elevated 2026 Capex Guidance
Management outlined a record $135–145 billion capital expenditure budget for 2026, focusing on data centers, AI infrastructure and research. Investors are weighing these spending commitments against near-term profit margins.
4. Valuation Metrics and Engagement
The stock trades at 22.99x trailing P/E and 17–18x forward 2027 earnings, metrics that may understate Meta’s AI-driven pricing power and core advertising dominance. Monthly active user engagement reached four billion users, marking a new record and underpinning long-term revenue potential.
