Meta Delivers Powerful Results: Is it Still Not Enough for the Market?
Date: 29 April 2026
Financial Performance: A Massive Beat on Expectations
Meta Platforms Inc. reported impressive financial results that exceeded market expectations, reinforcing its position as a leader in the technology sector. The company's earnings per share (EPS) reached $10.44, surpassing forecasts by $3.78, largely due to a significant tax benefit. Even without this benefit, earnings would have still exceeded expectations.
Meta's revenue for the quarter was $56.31 billion, reflecting a year-over-year growth of 33.1% and beating forecasts by $760 million. This growth was primarily driven by the advertising segment, which has benefited from increased adoption of artificial intelligence (AI) technologies.
User Engagement and Advertising Efficiency
Meta reported an average of 3.56 billion daily active users in March, marking a 4% increase year-over-year. However, there was a slight decline from the previous quarter, attributed to external factors such as internet outages in Iran and restrictions on WhatsApp in Russia.
In terms of advertising efficiency, the company saw a 19% increase in ad impressions year-over-year, indicating that users are engaging more with content. Additionally, the average price per ad rose by 12% year-over-year, suggesting that improved AI targeting is allowing Meta to sell ads at higher prices.
Outlook and CAPEX Concerns
Despite the strong Q1 results, the market reacted negatively, with Meta's share price dropping over 3% in after-hours trading, eventually widening to approximately 5.5%. The company's guidance for Q2 revenue is set between $58 billion and $61 billion, with the median falling in line with market consensus, which led to concerns about an overheated market.
Meta maintained its total cost guidance for FY 2026 at $162 billion to $169 billion, but raised its capital expenditure (CAPEX) forecast to $125 billion to $145 billion. Investors are wary that this significant spending on AI infrastructure could impact free cash flow in the upcoming quarters.
Strategic Shift: From Metaverse to Superintelligence
CEO Mark Zuckerberg introduced a rebranding of the company's narrative, emphasizing the launch of the Meta Superintelligence Labs. This initiative aims to develop "personal superintelligence for billions of people." The operating loss from Reality Labs was lower than expected, indicating that Meta is beginning to cut inefficient spending in favor of advancing large language models.
Summary
Meta's financial results were impressive, showcasing the effectiveness of its AI strategies with a notable increase in ad prices. However, the market's reaction reflects a classic "sell the news" scenario, as investors are concerned about the costs associated with building superintelligence. Despite some investor dissatisfaction, Meta remains competitively valued within the tech sector, with a forward P/E ratio around 22 and a forward P/S ratio below 7, trading significantly below its historical peaks.