Meta (META), AI Investment Burden Bomb...Stock Price Volatility Warning

▲ Meta (META)/AI-generated image

Meta Platforms (META) is once again being shaken by the burden of up to $145 billion in AI investment.

According to financial media outlet FX Leaders on July 29 (local time), Wall Street expects Meta's Q2 revenue to increase by approximately 27% year-on-year to $60.2 billion. The adjusted earnings per share (EPS) forecast is $7.18, and advertising revenue is projected to be around $59 billion. However, the revenue growth rate is expected to slow down compared to 33% in Q1.

Market attention has shifted to AI capital expenditures rather than earnings. Meta has raised its 2026 capital expenditure forecast from the previous $115 billion-$135 billion to $125 billion-$145 billion. Capital expenditures executed in Q1, including principal repayments for financial leases, amounted to $19.84 billion.

To meet its annual forecast, Meta must invest an additional $105 billion-$125 billion over the remaining three quarters. This averages $35 billion-$42 billion per quarter, more than double the $17.01 billion in capital expenditures for Q2 2025. The market expects Q2 capital expenditures to be approximately $33 billion.

Even strong Q1 earnings failed to support the stock price. At the time, revenue increased by 33% to $56.31 billion, and operating profit rose by 30% to $22.87 billion. The operating profit margin also reached 41%, but investors focused on the increased capital expenditure forecast and sold shares. The growth rate of total costs and expenditures was 35%, exceeding the revenue growth rate.

Reality Labs is also increasing the burden on profitability. The business unit recorded Q1 revenue of $402 million and an operating loss of approximately $4.03 billion. Meta is considering leasing its excess computing resources to external customers, but the advertising business still accounts for most of its performance.

Technically, $590 is the primary support level, and the $604-$621 range is the key resistance level. The Relative Strength Index (RSI) approached oversold territory at 34.16, but the Moving Average Convergence Divergence (MACD) remained a sell signal at -9.42. The options market reflected a 7-7.5% fluctuation after the earnings release, suggesting a range of approximately $550-$640. If $590 breaks, $580 and $550 are indicated as the next downside levels.

[Article Key Summary]

-Meta's Q2 revenue is expected to increase by approximately 27% year-on-year to $60.2 billion.

-The 2026 AI-focused capital expenditure forecast has been expanded to up to $145 billion.

- $590 is a key support level, and the options market reflected a 7-7.5% fluctuation after the earnings release.

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