Meta raises capex guidance to $130-145bn in 2026, citing aggressive AI data center expansion amid record spending and declining free cash flow.

Meta has raised its annual capital expenditure forecast to account for escalating costs associated with AI data centers. The company now expects to spend between $130 billion and $145 billion this year, an increase from the $115 billion–$135 billion range set at the beginning of the year and the $125 billion–$145 billion guidance issued in April. This follows a similar move by Amazon, which recently boosted its capex outlook by $20 billion, attributing the rise to the cost of memory for AI servers.

While investors were forgiving of Amazon’s increased expenditure—sending its shares higher—they were less kind to Meta. Meta’s stock dropped approximately 10 percent after the company reported quarterly free cash flow of $784 million, marking its lowest level in five years. By comparison, free cash flow stood at $8.5 billion during the same period last year.

Addressing the heavy investment on an earnings call, CEO and founder Mark Zuckerberg acknowledged the scale of the commitment. “I get that this is a big investment and it’s a big bet,” he said. “We see the technology working. We’re happy with the trajectory of the lab. I’m excited about the products that are coming. And we believe that this is going to be a big thing.”

Beyond internal infrastructure, Meta reaffirmed its ambition to expand into cloud services. Zuckerberg noted that the company is “getting a lot of offers for compute at a significant premium over what we paid for it.” Reports indicate Meta is in early discussions to lease computing capacity to Anthropic in a potential deal valued at up to $10 billion. To support its cloud expansion, Meta recently recruited David Brown, formerly of AWS, to lead the initiative.

Financially, Meta posted quarterly revenues of $61 billion, representing a 28 percent year-over-year increase, alongside profits of $6 billion, a 14 percent decline. Looking ahead, the company projected third-quarter revenue between $61 billion and $64 billion. This midpoint falls slightly short of Wall Street consensus estimates of $63.1 billion.