Meta Platforms Inc. on Wednesday raised its 2026 capital spending forecast for the second time this year, telling investors it now expects to spend between $112 billion and $115 billion on data centers, networking and AI silicon, as first-quarter advertising revenue blew past Wall Street estimates and the company’s Reality Labs division posted its widest quarterly loss on record.

The Menlo Park, Calif. company reported revenue of $46.8 billion for the three months ended March 31, up 17.4% from a year earlier and ahead of the $44.9 billion consensus tracked by FactSet. Earnings per share of $6.21 topped the $5.74 estimate. Advertising revenue, which accounts for roughly 98% of the family-of-apps business, rose 18.1% to $45.6 billion, driven by what Chief Financial Officer Susan Li described on the company’s earnings call as “broad-based strength” across e-commerce, gaming and consumer packaged goods. Reality Labs reported revenue of $412 million and an operating loss of $5.1 billion, the deepest quarterly loss the segment has posted since Meta began breaking it out separately.

Shares of Meta jumped 7.4% in extended trading Wednesday evening and held a gain of about 5.9% through midday Thursday in New York, lifting the stock to a fresh closing high. The reaction lifted other megacap names: Alphabet rose 2.1%, Amazon.com gained 1.8% and the Nasdaq Composite climbed about 1.1% by midafternoon.

The capex revision was the headline number for analysts. Meta entered 2026 telling investors to expect roughly $98 billion in capital spending; it lifted that range to $103 billion to $106 billion on its January call and has now taken the midpoint another $8.5 billion higher. Chief Executive Mark Zuckerberg, on the call, framed the increase as a direct response to what he called “compute scarcity that we now expect to persist through at least the end of next year.”

“We are choosing to lean in here,” Zuckerberg told analysts. “The political question that hung over the industry for most of the spring is settled, the infrastructure we are building is producing real revenue gains in our ads business today, and the cost of being a year behind on training capacity is much higher than the cost of being a year ahead.”

The guidance increase reignited a debate that has run through every megacap earnings call this cycle: whether the hyperscalers, freed from the threat of the Sanders-Ocasio-Cortez moratorium that died in the House Ways and Means Committee on April 22, are now overbuilding into a downturn that has not yet arrived. Combined 2026 capex guidance from Microsoft, Alphabet, Amazon and Meta now stands at roughly $362 billion, according to Visible Alpha — up from the $345 billion figure analysts were carrying just over a week ago, and more than double what the same four companies spent in 2024.

“Meta has put a number on the table that effectively dares competitors to match it,” said Mark Mahaney, an internet analyst at Evercore ISI, in a note circulated to clients Thursday morning. “The market is rewarding it for now because the ads business is delivering. The question for the next several quarters is whether ad pricing holds up well enough to absorb the depreciation that all of this hardware will start dropping on the income statement in 2027 and 2028.”

Reality Labs remained the segment investors found hardest to value. Meta said unit sales of its Quest 3S headset and Ray-Ban smart-glasses line both grew sharply year over year, but headcount and silicon investment in the division have continued to climb. Li told analysts the company expected Reality Labs operating losses for the full year to be “meaningfully higher” than 2025’s $17.7 billion, without giving a specific number. Zuckerberg pushed back, gently, on a question from a Bernstein analyst about whether the segment’s losses might be capped.

“I understand the question, and I am not going to give you a ceiling,” Zuckerberg said. “What I will tell you is that the same technical work that goes into the glasses and the headsets — the small models, the on-device inference, the multimodal understanding — is the same work that powers our ads systems and our AI assistant. We do not run those budgets as separate bets.”

The advertising number drew sharper attention from political observers because of its sources. Meta disclosed that revenue from China-headquartered advertisers, dominated by cross-border e-commerce sellers, grew 28% year over year and accounted for roughly 12% of total ad revenue in the quarter — a share that has roughly doubled since 2023. A Meta spokesperson said the company “complies with all U.S. trade and advertising rules” and noted that its top single advertisers remain U.S.-headquartered.

On AI strategy, Meta said its Llama 4 frontier model, rolled out into the ads-targeting stack and the Meta AI assistant in March, was now serving more than 1.2 billion monthly users across Facebook, Instagram and WhatsApp combined. The company said training of a successor model would begin in the third quarter at its expanded Newton, Mississippi campus and at a new site under construction outside Reno.

Energy disclosures, which Meta added to its earnings supplement last quarter under pressure from state-level lawmakers, drew their own attention. The company said its U.S. data centers consumed roughly 22.4 terawatt-hours of electricity in the first quarter, up 41% year over year, and that it had signed power-purchase agreements covering an additional 3.8 gigawatts of generation capacity since the start of the year, including a previously unreported 1.2-gigawatt deal with a consortium of small modular reactor developers in Tennessee.

“The energy line in the back of the supplement is going to matter more next quarter than the ad-pricing line,” said Lina Marquez, a semiconductor and infrastructure analyst at TD Cowen. “California’s state moratorium clears Sacramento next week, New York’s hearings start the week after that, and every megawatt these companies sign for is going to be litigated somewhere. Meta is moving fast on purpose because it believes the regulatory window is closing.”

Meta executives said the company would host an infrastructure-focused investor briefing in late June, and that further detail on its 2027 capex trajectory would come on the July earnings call.