META’s 10% sell-off weighs on NASDAQ

The tech-heavy NASDAQ Composite (IXIC) sank 0.5% an hour into the regular session on Thursday. The culprit? Meta Platforms (META). Mark Zuckerberg’s social media powerhouse led the move as it sold off more than 10% a day after blowout first-quarter earnings that failed to impress the market.

Meta reported a huge beat on the bottom line late Wednesday, earning $10.44 per share. However, excluding a one-time tax benefit, the figure falls to $7.31, still beating the consensus of $7.11 per share.

Revenue, likewise, exploded 33% higher YoY, reaching $56.3 billion compared with $55.5 billion.

But Meta raising its outlook on capex as Zuckerberg’s ambition to remain in league with the top hyperscalers in the AI cloud push sent investors to the exits.

Market sours on soaring AI capex spending at Meta Platforms

Meta announced that surging prices for data center costs, particularly rising semiconductor prices, had led them to raise the full-year 2026 outlook for capex from $115 billion-$135 billion to a new range of $125 billion-$145 billion.

Meta executives said the capex hike “reflects our expectations of higher component prices this year and, to a lesser extent, additional data center costs to support capacity for future years.”

Already wary of the previous range, traders sent META stock from near $670 down to $600 in Thursday’s session.

Meta spent about $72.2 billion in capex in all of 2025, so it’s possible that capex doubles in 2026 based on the latest estimate. This increase in projected costs is happening as Meta kept its Q2 revenue outlook in line with previous forecasts of $58 billion to $61 billion. That amounts to a 25% growth rate set against a backdrop of a near doubling in expenses, not something investors want to hear.

JPMorgan cut its 12-month price target on META from $825 to $725, however, so the stock still has room to melt up between now and July’s Q2 release.

META stock slides well below moving averages

Meta Platforms’ stock is now trading well below the 50-day Simple Moving Average (SMA) — near $630 — and the 200-day SMA above $678. The fact that the shorter SMA was already trending below its long-term counterpart confirms that the stock was already offering a bearish profile.

Beneath Thursday’s lows near $600, the November 2025 plunge near $582 offers near-term support in case the downside move continues. Below there lies the $520 support from late March.

Once some consolidation is achieved in May, bulls will target the 50-day SMA first before setting their sights on filling the gap from April 29’s low at $663.81.