Meta Platforms

Meta's advertising business just grew 33 percent year over year to 55 billion dollars in Q1 2026. That growth came from both more ads being shown, up 19 percent, and higher prices per ad, up 12 percent. Operating margin held at a fat 41 percent. When advertisers are paying more for fewer impressions, you know the targeting is working.

Meta released the first model from Meta Superintelligence Labs this quarter, and the AI is already paying for itself by sharpening ad targeting and the recommendation feed inside Facebook and Instagram. The Family of Apps reaches 3.56 billion daily users, up 4 percent year over year. Operating income at the apps division alone was 26.9 billion dollars in just one quarter.

Meta just raised 2026 capital expenditure guidance to 125 to 145 billion dollars, up from 115 to 135 billion. They spent 19.8 billion dollars in Q1 alone on data centers and AI chips, and skipped buybacks entirely. If AI investments do not generate matching returns, that is an enormous fixed-cost overhang on a business that lives and dies by ad pricing.

The Reality Labs division, which makes Quest headsets and AR glasses, lost 4 billion dollars on just 402 million dollars of revenue this quarter alone. Mark Zuckerberg has burned over 60 billion dollars on this bet so far with no clear path to profitability. Pending youth-safety lawsuits in the U.S. could also result in a material legal loss.