Meta Platforms (NASDAQ: META) has raised the lower end of its 2026 capital expenditure guidance to $130 billion, keeping the upper bound at $145 billion, signaling an all-in commitment to artificial intelligence infrastructure.
The announcement came alongside the company’s second-quarter financial results, reported on July 29, which sent shares down 10% immediately after the release.
Operating income for the second quarter came in at $18.8 billion, a figure that declined 8% compared to the same period a year earlier, as costs and expenses surged 55% year over year.
Research and development spending was the largest driver of that cost increase, exploding 68% and reflecting the scale of investment Meta is directing toward its AI ambitions.
Free cash flow dropped sharply from $8.5 billion in the second quarter of 2025 to just $784 million in the most recent quarter, illustrating the financial pressure of a major capital expenditure cycle.
Analyst consensus currently holds that Meta’s free cash flow will turn negative in both 2026 and 2027, placing the company firmly among the hyperscalers enduring a prolonged infrastructure spending period.
CEO Mark Zuckerberg acknowledged on the earnings call that Meta’s compute resources are in high demand, stating, “We have quite a number of offers at a meaningful premium over what we paid for the compute.”
Zuckerberg pointed to industry-wide supply constraints as a factor enabling Meta to generate near-term revenue by offering its resources to the broader market, though internal returns remain the priority.
He elaborated on how AI investments are already benefiting core operations, saying they “are improving the experience for people using our apps, driving better performance for advertisers, and helping our teams build new experiences and ship faster.”
On the revenue side, results were notably strong, with total revenue growing 28% in the second quarter, an impressive rate for a company operating at Meta’s scale.
Both ad impressions and pricing increased by double digits during the quarter, pointing to continued advertiser demand across Meta’s ecosystem of platforms.
Meta’s family of apps closed the quarter with 3.6 billion daily active users, underscoring the vast reach the company commands as it continues to integrate AI across its products.
With up to $145 billion in capital expenditure committed for the year, investors will be watching closely to see whether Meta’s AI infrastructure push translates into meaningful, sustained financial returns.
