Meta Raises 2026 Spending Floor to $135 Billion as Investor Concerns Mount
Key Facts
Meta raised the lower end of its 2026 capital spending forecast to $135 billion from $130 billion, keeping the upper end at $145 billion, a move that refocused investors on the cost of its AI expansion. The forecast includes the principal portion of finance lease payments. The announcement came with third-quarter results showing revenue of $64.60 billion, above analysts’ estimate of $63.34 billion. But the stock fell 7% after the results, Reuters reported, as attention centered on capital spending and the issuance of a new share class. By Oct. 23, EL7 data showed it had fallen from $705.44 on Oct. 19 to $642.62.
The operating business posted strong growth in the quarter, with revenue rising 26% year over year to $64.60 billion, compared with $51.24 billion in the same period of 2025. The result topped Wall Street’s estimate of $63.34 billion. Mark Zuckerberg said the company had reached key milestones during the quarter in its efforts to deliver “personal superintelligence to everyone.” He added that these included the launches of Muse and Muse Wonder, describing them as the company’s first advanced model. The results put revenue growth alongside the question raised by the spending increase: whether computing investments can support sustainable profits.
Stephen Innes of SPI Asset Management said investors now want evidence that billions of dollars directed toward building computing capacity will create a “sustainable profit engine,” according to AP. The scrutiny comes as the lower end of the spending forecast rises, while its $145 billion ceiling remains unchanged. On infrastructure financing, Meta’s board approved the creation of publicly traded, non-voting Class C shares, effective in January 2027. AP said the move is aimed in part at strengthening the company’s ability to raise capital for AI infrastructure investments. The company announced it would distribute one Class C share for each outstanding Class A or Class B share after the amendment takes effect, without changing any shareholder’s voting power.
The stock’s immediate response to the results was not negative; it closed up 0.5% in regular trading on Oct. 21, then rose 2.9% in extended trading after the announcement, according to AP. Reuters later reported a roughly 7% drop after the results, as investors turned their attention to spending and non-voting shares. In the same week, Meta shares fell from $705.44 on Oct. 19 to $642.62 on Oct. 23, according to EL7 data. Those moves alone do not establish that any single item caused the stock’s change; spending concerns and the share issuance were among the factors investors focused on. In the broader market on Oct. 23, the S&P 500 fell 0.5%, the Dow Jones 1.2% and the Nasdaq 0.2%, while the yield on 10-year U.S. Treasury notes reached 4.99%.
The spending review coincides with a shift in some of the company’s investments. Meta expects Reality Labs losses to narrow to about $15 billion in 2027, as it redirects investment to other areas, particularly AI. The company announced the launch of Muse and Muse Wonder during the quarter, as part of its efforts to develop personal superintelligence. This direction provides context for the higher capital spending floor, while also putting infrastructure funding and its expected return at the center of investor debate. The results did not include a figure specifying how much these products would add to revenue or profits.
In energy markets, Brent crude settled at $116.72 a barrel on Oct. 23, up 3.14% for the session and 6% for the week, its highest settlement since April 29, Reuters reported. The agency linked the price rise to concerns about supply disruptions after successive Houthi attacks in Saudi Arabia, including on energy facilities, and also cited an oil spill off the UAE. AP also linked higher oil prices to the fallout from the U.S. war with Iran, which it said had sharply reduced global oil supplies and raised energy costs. Brent rose from below $97 in early October to its Oct. 23 settlement, before falling 1.3% to $110.23 on the morning of Oct. 26. Oil thus remained a source of pressure on U.S. stocks, while Meta’s trajectory was also shaped by debate over AI spending and its financing.