Gotrade News - Meta Platforms reported Q1 2026 results on Thursday (30/04) that drew sharply mixed reactions from Wall Street analysts. Net profit surged 61% YoY, yet raised capex guidance pushed shares more than 7% lower in after-hours trading.
Key Takeaways:
- Meta net income climbed 61% to USD 26.77 billion, while 2026 capex guidance was lifted to USD 125-145 billion.
- UBS raised Meta's price target to USD 908 with a Buy rating, citing generative AI momentum.
- Oppenheimer lifted Amazon's price target to USD 275, with AWS framed as the primary growth engine.
Meta revenue reached USD 56.31 billion in Q1 2026, growing 33% YoY according to Watcher Guru. Net income rose to USD 26.77 billion, translating to EPS of USD 10.44 versus USD 6.43 a year earlier.
Ad impressions grew 19% YoY while average price per ad climbed 12% YoY. Family of Apps posted operating income of USD 26.9 billion at a 41% margin based on the company filing.
Meta lifted 2026 capex guidance to USD 125-145 billion from a prior range of USD 115-135 billion. Management attributed the increase to higher component pricing and incremental data center costs.
CFO Susan Li flagged higher depreciation, data center operating costs, third-party cloud spend, and AI talent hires. The commentary immediately weighed on market perception of Meta's AI capex Return on Investment.
Analyst Reactions and Market Sentiment
Melissa Otto of S&P Global Visible Alpha Research said the report raises real questions about ROI on capex spending. The investor community appears frustrated with the elevated cash burn rate per her statement.
UBS, in contrast, raised Meta's price target to USD 908 from USD 872 with a Buy rating on Thursday (30/04). The firm sees generative AI as the key driver of EPS revisions and valuation expansion through 2026.
Meta also announced layoffs of approximately 8,000 employees and halted hiring for 6,000 open positions. Evercore ISI estimates the move will generate annual savings of roughly USD 3 billion.
Cross Big Tech Implications
Oppenheimer lifted Amazon's price target to USD 275 from USD 260 with an Outperform rating. The firm projects strong AWS revenue growth through 2027 as the primary growth driver.
Citi maintained a Buy rating on Microsoft but trimmed the target to USD 600 from USD 635. The cut was attributed to multiple compression rather than weakening business fundamentals.
Meta shares fell more than 7% in after-hours trading on April 29. The decline was triggered by elevated capex guidance and uncertainty over AI investment returns per Watcher Guru analysis.
The key question for investors now is the balance between ad-revenue growth and capex burden. Big Tech must prove that aggressive AI spending translates into commensurate monetization within the next two quarters.
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