NEW YORK, July 26, 2026, 15:06 EDT — U.S. markets have finished trading for the day.
- Meta ended Friday at $595.19, a decline of 1.8%. The Nasdaq fell 2% for the week.
- Options are indicating a 7.4% move following earnings, or roughly $44 in either direction.
- Meta is projected to have a capex-to-revenue ratio of 54.9% in 2026, topping the list of four leading AI investors.
Meta faces a critical challenge in its report on Wednesday: converting revenue into cash. LSEG projects that capital expenditures will represent 54.9% of its 2026 revenue, the largest proportion compared to its key megacap rivals.
Advertising accounted for 97.7% of Meta’s revenue in the first quarter, company data shows, placing the weight of earnings on that segment.
Options market participants are anticipating a swing of 7.4% following the release. Based on Friday’s closing price, this translates to an approximate $44 fluctuation in either direction. The implied trading band spans from about $551 to $639.
The pressure increased last week. The Nasdaq dropped 2%, marking a second consecutive weekly loss. Meta slipped 1.8% on Friday, as concerns over AI spending weighed on technology stocks.
Meta stands out for its unusually high reinvestment rate, according to LSEG’s projected capex intensity:
| Company | 2026 capex as percentage of revenue (estimate) | Prior ratio | Change |
|---|---|---|---|
| Meta Platforms NASDAQ:META | 54.9% | 35.9% | 19.0 points |
| Microsoft NASDAQ:MSFT | 45.0% | 31.0% | 14.0 points |
| Alphabet NASDAQ:GOOGL | 41.0% | 23.0% | 18.0 points |
| Amazon NASDAQ:AMZN | 25.0% | 18.0% | 7.0 points |
Reuters has reported these figures, based on analyst forecasts.
Meta reported robust first-quarter advertising figures, reassuring investors. Ad impressions increased by 19%, and the average price per ad was up 12%. Revenue surged 33% to $56.31 billion.
However, most of the investment is slated for later in the year. Meta’s first quarter expenditure reached $19.84 billion. The company projects total capital spending for the year between $125 billion and $145 billion.
With the midpoint set at $135 billion, average quarterly capex would need to reach $38.4 billion. This figure is 93% higher than the capex rate reported in the first quarter. The estimate is calculated and not official company guidance.
Meta projected revenue for the second quarter in the range of $58 billion to $61 billion. Deutsche Bank ETR:DBK analysts expect earnings near $60.5 billion. “Our ad checks were overwhelmingly positive,” they wrote Friday. AtMeta
Alphabet reported a $5.9 billion cash burn last quarter, even as cloud revenue surged by 82%. Shares dropped roughly 6% on Thursday. The market response has now shifted expectations for Meta and other major AI investors.
Meta’s AI assistant gained new task automation capabilities on Friday. The platform now allows users to schedule tasks, integrate applications and generate presentations. Meta did not specify a revenue goal for these additions.
The company will announce results following the close of markets on Wednesday. Its earnings conference call begins at 1:30 p.m. Pacific. That day also brings the Federal Reserve’s decision, introducing additional macroeconomic uncertainty.
Risks persist. Increased component expenses might push capital expenditure higher. Ongoing legal proceedings in the U.S. and Europe could negatively impact outcomes, and an unexpected rate hike may weigh on technology valuations.
For shareholders, headline earnings are not the most direct indicator. The crucial question is whether growth in advertising revenue can sustain a sharp increase in quarterly spending. A robust top-line outcome along with unaltered capital expenditure forecasts would partly address that question.
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