![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2026\/04\/GettyImages-2261841364_299531-e1777584509102.jpg?w=2048\")
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Despite strong first quarter results, Meta\u2019s stock plummeted nearly 9% Thursday thanks in part to a 20-million user drop and a massive spike in AI spending even as it continues to pour billions into its metaverse and virtual reality division, Reality Labs.<\/p>\n
The company, which reported its first quarter results Wednesday afternoon, exceeded analyst expectations on both\u00a0net income and revenue, which stood at $26.8 billion (partly boosted by a one-time $8 billion tax benefit) and $56.3 billion, respectively, according to a filing with the Securities and Exchange Commission. Meta also saw a 33% revenue increase compared to the same quarter last year, its biggest year-over-year increase in five years.<\/p>\n
Yet, investors apparently paid more attention to the bad news.<\/p>\n
The company recorded 20 million fewer global users for its family of apps in the first quarter compared to the previous three months, a setback that Meta\u2019s chief financial officer, Susan Li, blamed on \u201cinternet disruptions in Iran, as well as a restriction on access to WhatsApp in Russia.\u201d Still, Li said the company recorded more than 3.5 billion daily active users across its app portfolio, which includes Facebook, Instagram, and Whatsapp, and that without the disruptions in Iran and Russia, daily active users for its family of apps would have been positive quarter over quarter. Meta has not yet responded to Fortune\u2019s <\/em>request for comment.<\/p>\n Maybe the bigger problem, though, was the company\u2019s expected capital spending, much of which is due to the company\u2019s increasing focus on AI, which jumped by almost $10 billion to between $125 billion and $145 billion. Li said on Wednesday\u2019s earnings call that the new predicted expenditures were necessary because \u201cwe have continued to underestimate our compute needs even as we have been ramping capacity significantly, as the advances in AI have continued and our teams continue to identify compelling new projects and initiatives.\u201d\u00a0<\/p>\n Notably for Meta, the company also reported Wednesday that it has continued to pour billions of dollars into the metaverse. In the first quarter, the company\u2019s metaverse and virtual reality division, Reality Labs, reported an operating loss of $4.03 billion, even as the company has been laying off employees across multiple rounds in 2026, including a 10% cut to Reality Labs\u2019 roughly 15,000 person workforce. Meta said earlier this month it would lay off 10% of its overall workforce, or about 8,000 employees. The company has lost approximately $80 billion on its Reality labs since it started breaking out its results in late 2020.\u00a0<\/p>\n While Meta\u2019s stock sank, Alphabet\u2019s stock hit an all-time-high Thursday and closed up more than 9% while it also raised its capital expenditure expectations. The company said it now expected to spend between $180 billion and $190 billion, up from its last estimate of between $175 and $185 billion.\u00a0<\/p>\n Matt Britzman, an analyst with U.K.-based investment platform Hargreaves Lansdown, wrote in a Thursday note that investors were more mixed than previously on AI spending.\u00a0<\/p>\n \u201cThe market was less united on what to make of the spending plans, with investors still trying to balance the scale of the AI opportunity against the cash required to chase it,\u201d he wrote.<\/p>\n As for Meta, Britzman said while investors are focusing on costs they may miss the company\u2019s strong fundamentals, including its advertising momentum and AI advances that improve monetization.<\/p>\n \u201cMeta still looks like one of the clearest examples of heavy investment translating into returns for its core business,\u201d he wrote.<\/p>\n<\/div>\n #Meta #spend #lost #billion #Metaverse #million #users<\/p>\n","protected":false},"excerpt":{"rendered":" Despite strong first quarter results, Meta\u2019s stock plummeted nearly 9% Thursday thanks in part to a 20-million user drop and a massive spike in AI spending even as it continues… <\/p>\n","protected":false},"author":1,"featured_media":1099,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[1250,1056,457,744,863,585,362,400,1785,573,1786,602,1787],"class_list":["post-1098","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-alphabet","tag-billion","tag-earnings","tag-google","tag-layoffs","tag-lost","tag-mark-zuckerberg","tag-meta","tag-metaverse","tag-million","tag-spend","tag-tech","tag-users"],"_links":{"self":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1098","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1098"}],"version-history":[{"count":0,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1098\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/media\/1099"}],"wp:attachment":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1098"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1098"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1098"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}