Meta’s disappointing revenue forecast puts AI spending under the microscope

Meta just delivered the corporate equivalent of a mixed report card. Revenue came in above expectations, advertising is humming along, and the core business looks healthy. But the company’s earnings per share missed by nearly a dollar, and investors are starting to wonder whether Meta’s AI spending spree has an off switch. The social media giant reported Q2 2026 revenue of $60.8 billion, edging past analyst estimates of roughly $60.2 billion. That sounds great in isolation. The problem is everything else on the income statement. The numbers behind the nerves Meta’s earnings per share landed at $6.18 for the quarter ending in late July. Wall Street had penciled in $7.14. That’s not a small miss. It’s the kind of gap that makes analysts start typing “margin compression” in bold. The culprit is familiar by now: capital expenditure. Meta raised its 2026 capex guidance to a range of $125 billion to $145 billion, up from previous projections. To put that in perspective, $145 billion is more than the entire GDP of Hungary. And it’s being funneled almost entirely into AI infrastructure, from data centers to custom chips to the compute power needed to train increasingly massive models. Adve...