Meta is still burning money on AR/VR

Meta’s Q1 earnings revealed strong core results but highlighted continued heavy spending on Reality Labs and AI. Reality Labs lost about $4 billion in the quarter — roughly matching a 21-quarter average that totals $83.5 billion — while Meta reported net income of $26.8 billion (up 61% YoY) and revenue of $56.3 billion (up 33% YoY). Management raised 2026 infrastructure capex guidance to $125–$145 billion as it pivots heavier into AI, citing higher component and memory costs and uncertain future compute needs. Investors reacted negatively, sending Meta shares down more than 5% in after-hours trading. Market impact: strong profitability cushions long-term investment but elevated capex and sustained Reality Labs losses are weighing on sentiment and share price.