Meta stock drops 4.85% as capital expenditure raised to $125

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Meta slides 4.85% to $603.97 today

Highlights

Meta exceeded analyst expectations with Q1 2026 revenue of $56.3 billion, up 33% year-over-year, but increased capital spending guidance to $125–$145 billion raises concerns about future profitability.
User engagement fell as daily active people decreased to 3.56 billion, while ongoing U.S. and EU regulatory pressures and the forced divestiture of Manus in China heighten operational risks.
Shares trade below key moving averages amid strong intraday selling; high volatility signals a likely range-bound move between $585 and $630 with a downward price bias.

Profit outlook questioned as AI spending rises and regulatory risks mount

Meta posted first quarter 2026 revenue of $56.3 billion, reflecting a 33% increase year-over-year and surpassing published analyst forecasts. The company raised its full-year capital expenditure forecast to $125 billion to $145 billion as it boosts investment in artificial intelligence infrastructure, a move that may signal concerns about future profitability. New disclosures highlighted a decline in daily active people to 3.56 billion and detailed ongoing regulatory pressures, including fresh U.S. legal action around youth safety and a formal EU finding of Digital Services Act violations. Additionally, China forced Meta to unwind its $2 billion acquisition of AI startup Manus, curbing technology expansion plans in the region.

Bearish momentum persists as oversold signals meet weak trend

Technically, META is now below the SMA-20 at $641.97, the SMA-50 at $630.95, and the SMA-200 at $679.08. Immediate resistance is defined by the Ichimoku Kijun at $605.99, while the recent intraday low is at $623.67. On the indicator side, the D1 MACD suggests strong upside potential, although the ADX at 15.26 points to a weak, non-directional trend. RSI is at 47.57, showing slightly bearish momentum; Stoch RSI and CCI are both in oversold territory, while BBP still reflects overbought conditions due to earlier bullish action. The session opened with a notable gap up before reversing sharply, highlighting a pronounced selloff and volatile price action.

Downside favored as technical barriers and volatility cap upside

Over the next five trading days, META is expected to trade in a $585 to $630 range, based on typical volatility relative to current levels. The probability of a price rise is very low, with less than a 20% chance implied by current technical and fundamental signals, making a downward move the more plausible scenario. The baseline case projects choppy, sideways price action within this corridor. A sustained break and close above the $606–$630 resistance zone would be required to trigger a bullish scenario, whereas a drop below $585 would open the door to further downside.

Anton Kharitonov, expert at Traders Union, sees Meta’s short-term price action as capped by deepening operational and regulatory headwinds. Despite strong headline revenue, he believes negative sentiment prevails due to higher capital spending, falling user numbers, and mounting legal challenges. Technical levels and momentum indicators confirm a lack of bullish conviction and reinforce the downside bias. "Until $606–$630 is reclaimed, risk stays skewed to the downside and any rallies are likely to be sold into."

Earlier, analysts noted that Meta was likely to face continued sideways consolidation amid mixed technical signals and ongoing corporate headwinds. The current backdrop of heightened volatility and heavier selling pressure reinforces the view of limited upside, making a clear break above the $606–$630 resistance zone the key signal for any potential bullish reversal in the near term.

Source of Data: META Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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