Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTAlex SiroisThu, July 23, 2026 at 3:26 PM GMT+2 4 min readQuick ReadMeta spent $19B on capex in Q1 2026 while delivering 33% revenue growth and holding 41% operating margins, killing the AI spending bear thesis.META's 30-day post-earnings return of 17% nearly doubled QQQ's 9%, rewarding concentrated exposure over the index alternative.Reality Labs burned $4B in Q1 2026, but analysts still target $823 for META against a $646 price, preserving the bull case.Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.I keep building a position in Meta Platforms (NASDAQ:META), and every quarter the case for adding more gets stronger, not weaker. The bear thesis I heard for eighteen months, that AI capital spending would eat the margins alive, has now been tested against real numbers. The numbers won.Quality Stock Arts / Shutterstock.comThe Capex Panic Was Priced in FearQ1 2026 was the quarter the argument should have broken. Meta spent $18.997 billion on capex, up 46.8% year over year, and raised full-year guidance to $125 to $145 billion. And yet revenue grew 33.08% to $56.311 billion, operating income climbed 30.29%, and free cash flow stayed positive at $12.386 billion. Operating margin held at 41%. Those are the numbers of a company compounding through its investment cycle.The reason the pie does not shrink is the whole game. Meta has kept everyday operating costs flat by cutting non-core corporate layers, freezing traditional infrastructure, and executing deep workforce reductions, funneling the freed capital into GPUs and data centers. Those hardware purchases are booked as capex, so the cash goes out immediately but hits the income statement gradually as depreciation over a 4-to-5-year useful life. By the time those charges arrive, AI-driven ad targeting has already delivered double-digit revenue growth that outpaces the creeping overhead. That is how you keep near-40% margins while spending like a utility.Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Meta didn't make the cut. Grab the names FREE today.Three Reasons the Compounding Case HoldsFirst, monetization is accelerating alongside the spend. Ad impressions rose 19% year over year in Q1 2026 and average price per ad rose 12%. Family daily active people reached 3.56 billion. The business keeps finding more inventory and charging more for it.Second, the returns on capital are what you would expect from a fortress. ROIC sits at 20.69%, ROE at 30.24%, and net profit margin at 30.08%. Debt to equity is 0.39. Interest coverage is 71x. There is no financial fragility here.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info