Meta experienced a “milestone quarter” in the first quarter of 2026, reporting substantial financial growth and outlining plans to significantly increase its investment in artificial intelligence infrastructure. The social media giant saw its revenue climb 33% year-over-year to $56.3 billion, while net profit surged by 61% to $26.8 billion. This profit figure was notably boosted by a one-time tax benefit of $8.03 billion; without it, net profit would have been $18.7 billion.
In response to escalating costs for computer components, particularly memory, and the need to secure sufficient infrastructure for future digital products, Meta has raised its 2026 capital expenditure guidance. The company now anticipates spending between $125 billion and $145 billion, an increase from the previous forecast of $115 billion to $135 billion. Chief Financial Officer Susan Li stated during the first-quarter earnings call, “We are investing aggressively to meet our infrastructure needs and ensure we maximise our strategic flexibility over the coming years.” This strategic shift aligns with Meta’s broader ambition towards what CEO Mark Zuckerberg terms “personal superintelligence.” Other major tech companies like Alphabet, Microsoft, and Amazon are also increasing their capital expenditures to bolster server and data center capacity in response to AI-driven demand.
Meta’s AI push is underscored by the launch of Meta Superintelligence Labs and its advanced model, Muse Spark, which has already enhanced the Meta AI assistant. To support these initiatives, Meta is investing heavily in infrastructure, including custom silicon chips developed with Broadcom and utilizing chips from AMD, in addition to systems from NVIDIA. The company has also made significant contractual commitments with third-party cloud providers to bridge capacity gaps. These AI investments appear to be yielding positive results in Meta’s core business, with increased engagement on Reels and Facebook video, and a tenfold rise in weekly conversations between users and business AIs on WhatsApp and Messenger.
Zuckerberg envisions AI amplifying human capabilities rather than replacing them, aiming to deliver personal agents that assist users with their goals. This vision extends to hardware, with daily usage of AI-enabled glasses tripling over the past year. However, Meta’s Reality Labs segment, focused on virtual and augmented reality, continues to incur substantial losses, reporting a $4.03 billion loss in the first quarter on $402 million in revenue. The company’s advertising business, its primary revenue source, grew 33% year-over-year to $55 billion. Meta noted a slight dip in Daily Active People, attributed to internet disruptions and service blocks, and acknowledged ongoing scrutiny regarding youth issues and personalized advertising regulations in the US and EU.
In line with its focus on efficiency, Meta plans to further reduce its employee base in May 2026, despite aggressive hiring for AI talent. Zuckerberg explained that advancements in AI allow smaller teams to achieve results previously requiring much larger groups. Meta ended the quarter with 77,986 employees, a slight decrease from the previous quarter.
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