Meta tanks 10%, Alphabet climbs 5% as each company raises AI spending (capex)

Alphabet and Meta reported strong first-quarter results, but their stock reactions split sharply after both companies announced higher spending on artificial intelligence infrastructure.
Alphabet Inc. shares rose more than 5% after it beat revenue expectations, boosted by strong growth in Google Cloud (+63%) and rising demand for AI tools. The company also raised its 2026 capital spending forecast to $180–$190 billion.
Meta Platforms Inc. dropped about 10%, marking its worst day in months, even though it also beat earnings expectations. Investors reacted negatively to its increased AI spending plan, now up to $125–$145 billion, with concerns about how it will generate returns since Meta lacks a cloud business.
The broader takeaway: Wall Street is increasingly split on massive AI investments. Companies like Alphabet, Microsoft, and Amazon can monetize AI through cloud infrastructure, while Meta faces more uncertainty about returns.
Analysts noted that AI spending across Big Tech is still accelerating rather than slowing down, signaling an ongoing investment race rather than a peak.