Meta's Earnings Paradox: A Brilliant Quarter The Market Chose To Punish

Meta Platforms reported a strong Q1 with revenue of $56.31B and adjusted EPS of $7.31, beating consensus and showing AI-driven strength as average ad price rose 12% year-over-year. Despite the operational beat and signs of early AI monetization, the market punished the stock after management sharply raised 2026 capex guidance to $125–$145B, highlighting increased capital intensity and investor concern about returns on heavy AI spending. The sell-off erased gains from the quarter (post-market price shown down ~5.9%), but the analyst remains constructive, maintaining a $975 price target based on sustained high margins (34–35%) and successful AI monetization, implying medium-to-long-term bullish fundamentals offset by near-term market headwinds.