Meta Platforms (META) to Spend $135 Billion on AI in 2026

Meta Platforms (NASDAQ:META) runs the world's largest social advertising business, the parent of Facebook, Instagram and WhatsApp, and the company now finds itself explaining why it is turning into one of the heaviest capital spenders in tech. Shares fell 4.9% to 582.90 dollars, pressuring a stock that has already slid well off its highs as investors weigh a massive AI infrastructure bet against the advertising engine that still funds nearly all of it.

A Capex Number That Doubles in a Year

Meta has told investors it plans to spend between 125 billion and 145 billion dollars on capital expenditures in 2026, almost entirely tied to AI infrastructure. The top end of that range is roughly double the 72 billion dollars the company spent last year. For a business long known for capital light operations and outsized free cash flow, that shift changes the investment case. It also raises the bar for what Meta needs to show on the revenue side to justify the outlay.

The rationale traces back to comments Mark Zuckerberg made on the first quarter 2025 earnings call, where he laid out five AI priorities: better recommendations and content, business messaging, the Meta AI assistant, AI powered devices, and, above all, advertising. Zuckerberg described a future where any business simply tells Meta its objective, whether that is a sale or a new customer, along with what it is willing to pay per result, and Meta's systems handle the rest. He argued that if this works, AI driven productivity gains could push advertising into a meaningfully larger share of global GDP than it occupies now.

That ambition matters because advertising is essentially the entire company. Ad sales reached 55 billion dollars in the first quarter ended March 31, accounting for 98% of total revenue. Whatever else Meta builds, from Reality Labs hardware to AI assistants, the business remains an advertising machine, and the capex ramp is best understood as an attempt to keep that machine compounding.

Meta's Valuation, Momentum and Dividend Yield

At 582.90 dollars, Meta trades with a price to earnings ratio of 24.31 and a market capitalization of 1.48 trillion dollars, putting it in rare company among the mega caps even after this year's pullback. The stock's 52 week range spans 540.18 to 691.52 dollars, and the current price sits closer to the lower third of that band, a reflection of the roughly 15% year to date decline and the near 29% drop from its record that had already been building before today's move.

Momentum readings are notably neutral. An RSI of 50.04 sits right at the midpoint of the 0 to 100 scale, suggesting the stock is neither overbought nor oversold after today's drop, essentially undecided territory rather than a signal of capitulation or a bounce setup. The dividend yield, at 0.36%, remains a minor consideration for total return here; this is not an income name, and the payout is unlikely to be the deciding factor for anyone weighing the stock.

The bull case rests on the underlying ad numbers. Meta's first quarter showed a 19% year over year increase in ad impressions alongside a 12% rise in average price per ad, combining for 33% revenue growth, the fastest pace since the third quarter of 2021. If AI driven targeting and automated campaign tools keep expanding both variables, the capex could look justified in hindsight, and the 24.31 P/E might prove modest relative to accelerating earnings power.

The bear case is straightforward: 135 billion dollars in projected 2026 capex demands sustained proof, not a single strong quarter. Investors have already shown they are willing to punish the stock, hence the drop to the lower end of its 52 week range and the 4.9% daily decline. Should ad growth decelerate or AI spending fail to translate into measurable efficiency gains, the market is likely to keep discounting the shares until the return on that capital becomes visible in the income statement.