Meta's Revenue Jumps 26%, But AI Spending Drives 83% Net Income Plunge, Shares Dip

However, the company also experienced an 83% drop in net income to $2.7 billion, partly due to a substantial one-time income tax charge. Meta's capital expenditures outlook for 2026 was raised, with the company anticipating notably larger dollar growth in capital expenditures and a significantly faster percentage rate of total expense growth compared to 2025.

This increased spending is primarily driven by infrastructure costs and employee compensation, particularly for AI talent. Despite the strong revenue, Meta shares saw a decline in after-hours trading.

The article also touches upon strong earnings from Microsoft and Alphabet, highlighting their significant revenue growth and increased capital expenditure forecasts, largely fueled by AI investments.