Meta results strong but spending plans weigh on shares, says UBS

Meta reported stronger-than-expected Q1 revenue and EPS, but UBS says the market reaction was driven by guidance rather than the headline beats. Meta raised 2026 capex guidance to $125bn–$145bn (from $115bn–$135bn), signaling heavier AI infrastructure investment. Second-quarter revenue guidance of $58bn–$61bn was judged “in line with Street at midpoint,” limiting near-term upside. UBS views the capex increase and in-line guidance as negatives that offset the beat, shifting investor focus toward execution and returns on AI spending and product development (eg, Meta AI/business chatbot). The note underscores a broader tech trend: rising AI investment supports long-term growth expectations but raises questions about near-term returns and valuation sensitivity.