Key Highlights

  • META shares fell 8.94% pre-market to $533.26, down from a prior close of $585.61.
  • Q2 adjusted EPS of $6.18 missed the $7.14 to $7.22 consensus range by roughly 13%, despite revenue of $60.8 billion topping the $60.2 billion estimate.
  • The company raised the low end of its full-year 2026 capex guidance to $135 billion to $145 billion, from a prior $125 billion to $145 billion range.
  • Q3 revenue guidance of $61 billion to $64 billion came in below the $63.17 billion Street estimate.

Profit Miss Overshadows Revenue Beat

Meta Platforms (NASDAQ:META) shares are sliding in pre-market trading, down nearly 9% from the previous close, as investors react to Q2 earnings released Wednesday after the close that showed a sharp profit miss despite revenue beating estimates. Adjusted EPS of $6.18 fell about 13% short of consensus as AI infrastructure spending compressed margins, with operating margin falling to 31% from 38% a year earlier, while Q3 revenue guidance of $61 billion to $64 billion came in below the $63.17 billion Street estimate.

Meta Platforms, headquartered in Menlo Park, California and led by founder and CEO Mark Zuckerberg, is a global technology company that connects billions of people through its Family of Apps, including Facebook, Instagram, Messenger and WhatsApp. Profitability was pressured by $3.58 billion in one-time legal and severance charges, alongside a higher effective tax rate for the remainder of the year.

Capex Raise and Management Response

Meta carries a market capitalization of approximately $1.49 trillion, with shares trading at a forward price-to-earnings ratio of 12.35 and a trailing multiple of 17.37. The stock's 52-week range spans $520.26 to $796.25, and the dividend yield stands at 0.36%.

Management raised the low end of its 2026 capital expenditure guidance to $135 billion to $145 billion, up from a prior $125 billion to $145 billion range, with capital expenditures of $31.1 billion in the quarter alone. CEO Mark Zuckerberg defended the aggressive AI buildout, telling analysts it would be foolish to scale back compute investment given demand, while the company announced a new BlackRock strategic venture for a 1-gigawatt data center in El Paso, Texas.

The results extend a broader selloff in mega-cap tech names also grappling with AI-spend scrutiny following Alphabet Inc.'s (NASDAQ:GOOGL) capex-driven decline earlier in the week. Engagement metrics remained solid, with Instagram reaching 2 billion daily actives and Threads crossing 500 million monthly actives, though those gains did little to offset the near-term margin concerns driving Thursday's pre-market decline.

Conclusion

Meta's decline reflects a genuine earnings miss driven by one-time charges and rising AI infrastructure costs, compounded by capex guidance that keeps climbing even as revenue growth remains solid. With management standing firm on its AI investment thesis, investors will be watching whether the spending translates into monetization gains that can eventually offset the near-term margin compression.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.