Shares slid 3.8% to $639.50 on July 17 as investors continued to punish Meta for the sheer scale of its AI spending ambitions and lingering fears that the company may sell billions of dollars in new stock to pay for them. The stock is now down roughly 15% in 2026 and about 29% off its record high , even though Q1 revenue rose 33% year-over-year to $56.31 billion, operating income grew 30% to $22.87 billion, and operating margins held at a healthy 41% . The disconnect between a booming ad business and a sinking stock price tells you everything about what's scaring Wall Street.

  • The Spending Plan That Changed the Math. Meta raised its full-year 2026 capital expenditure guidance to $125–$145 billion, up from a previous range of $115–$135 billion, citing higher chip prices and additional data center costs . The upper bound is roughly double the $72 billion spent in 2025 . That means a company once famous for printing cash with minimal physical assets is now spending more on infrastructure in one year than most industrial companies spend in a decade. Operating cash flow of $32.2 billion in Q1 remains substantial but is increasingly insufficient to cover capital spending without tapping other sources .

  • A Stock Sale Could Shrink Every Shareholder's Slice. Meta is considering a significant equity offering — potentially tens of billions of dollars — as reported by the Financial Times, which triggered a 6–9% single-day drop . The company is examining the mandatory convertible preferred stock structure Alphabet used, which lets it raise cash now but delays issuing new common shares for several years . Combined with the halt of Meta's long-standing share buyback program, the message is clear: cash is going to data centers, not back to shareholders .

  • The CEO Himself Admits Results Are Lagging. On July 2, Zuckerberg acknowledged internally that Meta's AI-powered automated assistants "haven't really accelerated in the way that we expected" over the past four months . That candid admission undercuts the argument that massive spending will quickly pay for itself. One bright spot: Meta's AI-driven ad-targeting tools crossed a $20 billion annual revenue run rate after more than doubling year-over-year — real proof the technology works somewhere.

  • Lawsuits Add Another Cloud. A California jury in March awarded $6 million in a bellwether social media addiction trial, with 70% of damages allocated to Meta . Attorneys general from four states are pursuing penalties Meta says could total $1.4 trillion , and a major federal trial is set for August 18 . These proceedings are unlikely to produce existential costs, but they add legal uncertainty atop an already nervous market.