Meta reports strong Q1 2026 with 33% revenue growth but shares drop 6% on higher CapEx and regulatory risks

Meta Platforms posted robust Q1 2026 results, with revenue rising 33% to $56.31 billion and earnings per share beating estimates by 7.2%. Despite strong financial performance, Meta's shares fell 6% after the report due to a raised capital expenditure outlook of $125 billion to $145 billion and potential regulatory fines up to $12 billion from EU child safety investigations. The company remains a strong buy thanks to its dominant advertising business, high gross margins around 82%, and promising AI-driven monetization through its Muse Spark Shopping Mode. Investors should watch regulatory developments and returns on AI investments closely going forward.