Meta Projects $125–145 B 2026 Capex While Reality Labs Loses $4 B
Meta raised its 2026 infrastructure capital expenditure forecast to $125–145 billion, citing rising memory and component costs while aiming to deploy over 1 GW of custom silicon alongside AMD and Nvidia chips. In Q1 the company posted $26.8 billion profit on $56.3 billion revenue but saw Reality Labs lose $4 billion and announced May headcount reductions to offset heavy AI investments.
1. Capex Forecast Surge
Meta increased its 2026 infrastructure capital expenditure forecast to a range of $125 billion to $145 billion, up significantly from prior guidance. The boost reflects higher memory and component prices, with plans to integrate over 1 GW of custom Broadcom silicon alongside AMD and Nvidia chips.
2. Q1 Financial Performance
In the first quarter, Meta delivered net income of $26.8 billion on revenue of $56.3 billion, representing year-over-year gains of 61% and 33%, respectively. Strong core performance contrasted with mounting costs from AI and infrastructure investments.
3. Reality Labs and AI Investments
The Reality Labs division incurred a $4 billion loss in Q1, its average quarterly deficit since 2021. Meta’s commitment to AI saw capex rise without clear near-term revenue ties, as the company bets on future “agentic” models and novel applications.
4. Cost Efficiency and Workforce Reductions
To manage ballooning expenses, Meta plans headcount reductions in May and emphasizes efficiency initiatives across its businesses. CFO guidance warns that leaner operations are needed to support sustained investment in AI and infrastructure.