Meta Platforms is about to walk into its Q2 2026 earnings call on July 29 carrying a question that no amount of impressive ad revenue can fully answer: is spending up to $145 billion on AI infrastructure actually worth it?

The stock has slipped roughly 10% year-to-date, and investors have seen the revenue numbers. What they haven’t seen is a clear, near-term payoff from a capex budget that has essentially doubled in a single year.

The numbers look great, so why the anxiety?

Meta’s top line is humming. The company posted approximately 33% year-on-year revenue growth in Q1 2026, comfortably beating analyst expectations on both revenue and earnings per share.

But after that Q1 earnings call on April 29, shares dropped about 10%. Not because the results were bad, but because Meta simultaneously revealed that its capital expenditure plans were climbing due to rising component costs.

For Q2, consensus estimates peg revenue at around $60.23 billion, with earnings per share projected at $7.19. The average operating margin is expected to land near 40%.

The disconnect is the capex guidance. Meta has told the market to expect between $125 billion and $145 billion in capital expenditures for 2026. Compare that to $72 billion in 2025.

The broader AI spending reckoning

Meta isn’t the only tech giant facing this scrutiny. Alphabet’s recent earnings performance has reflected a similar hesitance from investors about the timeline for AI investment returns.

CEO Mark Zuckerberg has acknowledged that while Meta’s AI models are progressing, initial versions may not be leading the frontier of innovation. Meta’s AI ambitions are now centered around Meta Superintelligence Labs, where Zuckerberg is pushing for ongoing model development.

Free cash flow is the real battleground

When you’re spending this aggressively on capex, even strong operating margins can get squeezed on the cash flow statement. Analysts have flagged potential strains on free cash flow as operating expenses climb in tandem with the infrastructure buildout.

The 40% operating margin projected for Q2 provides a cushion. If component costs continue rising, and if the revenue acceleration from AI products takes longer than expected to materialize, that margin could come under pressure in subsequent quarters.

Meta’s advertising business posted a 33% year-on-year growth rate in Q1. The metaverse pivot, which Meta pursued aggressively just a few years ago, is still fresh in the market’s memory, leaving shareholders with a lower tolerance for deferred returns.

What investors should watch on July 29

The earnings call itself will likely be less about whether Meta hits the $60 billion revenue target and more about forward guidance. Any signal that capex might be moderated, or that specific AI products are generating measurable revenue, could shift sentiment quickly.

Investors should pay close attention to any updates on monetization timelines for AI features across Meta’s family of apps. Instagram, Facebook, and WhatsApp collectively reach billions of users, and even modest per-user revenue increases from AI-driven features could justify the spending thesis over time.