Meta Delivers Powerful Results: Is it Still Not Enough for the Market?

Financial Performance: A Massive Beat on Expectations

Meta delivered results significantly above the market consensus, confirming its dominance in the tech sector, even as the market reacted nervously to the “price tag” of this success.

• EPS (Earnings Per Share): $10.44 – outperforming expectations by an impressive $3.78 . It is important to note, however, that this includes a significant tax benefit. Even excluding this benefit, earnings would have comfortably beaten expectations.
• Revenue: $56.31 billion (+33.1% Y/Y) – Meta beat forecasts by $760 million . This represents the strongest growth momentum in years, driven almost entirely by the advertising segment, which in turn benefits from high AI adoption.
• Family Daily Active People (DAP): Averaged 3.56 billion people in March (+4% Y/Y). While a slight quarter-on-quarter decline was noted, the company clearly pointed to external factors: internet outages in Iran and restrictions on WhatsApp access in Russia.

Advertising Efficiency: AI on the Offensive Operational data shows that investments in Meta Superintelligence Labs models are starting to boost margins:

• Ad Impressions: The number of ad impressions increased by 19% Y/Y . This indicates that users are consuming more content and that recommendation algorithms are more effectively retaining them on the platforms.
• Average Price per Ad: The average price per ad rose by 12% Y/Y . This is a critical signal—Meta is not just displaying more ads; thanks to better AI targeting, it is able to sell them at significantly higher prices.

Outlook and CAPEX: A Bone of Contention for Wall Street

Despite stellar Q1 results, the market focused on forecasts and costs, resulting in a share price drop of over 3% in after-hours trading, which later widened to approximately 5.5% .

• Q2 Revenue Guidance: Range of $58–$61 billion . While these numbers are solid, the median ( $59.5 billion ) falls almost exactly in line with the consensus ( $59.57 billion ), which served as a signal for an overheated market to take profits (“no spectacular raising of the bar”).
• Total Costs (FY 2026): Maintained in the range of $162–$169 billion . Importantly, the bar was not raised here, unlike the situation with CAPEX.
• CAPEX (FY 2026): This saw the most significant change, with the forecast raised to $125–$145 billion . Investors fear that gargantuan spending on AI infrastructure (data centers, chips) will begin to “eat” into Free Cash Flow in the coming quarters.

From Metaverse to Superintelligence

Zuckerberg made a symbolic rebranding of the narrative this quarter.

• Meta Superintelligence Labs: This is the new name intended to capture investor attention. The launch of the first model from this lab is meant to be a step toward “personal superintelligence for billions of people.”
• Reality Labs: The operating loss ( $4.03 billion ) was lower than the anticipated $4.77 billion , suggesting that Meta is starting to “cut” inefficient spending in this segment in favor of developing large language models.

Summary

Meta delivered the kind of numbers most Big Tech companies dream of, but the share price reaction reflects a classic “sell the news” scenario. The market received confirmation that AI is working (12% growth in ad prices) but was simultaneously terrified by the bill Zuckerberg is presenting for building “personal superintelligence.” Nevertheless, it must be emphasized that Meta’s AI adoption is progressing at a very rapid pace compared to other firms, and for several quarters now, we have observed real growth in overall revenue thanks to the use of artificial intelligence tools. While Meta’s ambitious multi-billion dollar projects haven’t always ended in success, as long as the company earns billions of dollars, it can afford to experiment. Although investors may seem somewhat less satisfied, Meta remains one of the cheaper companies in terms of valuation within the broader tech group. The company boasts a

Forward P/E of around 22 and a Forward P/S below 7 . Twenty minutes after the results, the stock was trading potentially around $631 per share , 20% below historical peaks.

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