Mark Zuckerberg Is Betting Up to $145 Billion on AI Infrastructure in 2026

As of this writing, which is after the market closed on July 29, shares of Meta Platforms (NASDAQ: META) have fallen 10%. Earnings in Q2 (ended June 30) came in below estimates, while third-quarter revenue guidance was weaker than expected.

This extends the social media stock's losing streak. It's trading 26% below its all-time high from August 2025.

The market's attention in recent quarters has been directed to spending trends. Meta raised the lower end of its guidance for 2026 capital expenditures (capex) to $130 billion from $125 billion. But the upper end, $145 billion, was kept unchanged.

The business is betting it all on artificial intelligence (AI). Here's what investors need to know.

Image source: The Motley Fool.

Profits are under pressure

During the second quarter, Meta reported operating income of $18.8 billion. This figure declined 8% year over year. That's because costs and expenses surged 55%. The gain is mostly coming from research and development, which exploded 68%.

Free cash flow (FCF) went from $8.5 billion in Q2 2025 to $784 million in the most recent quarter. Like the other hyperscalers, Meta is in the middle of a major capex super cycle. It's sparing no expense. The consensus view among analysts is that FCF will be negative in 2026 and 2027.

For what was such a wildly profitable business historically, this is a new normal that investors must get used to.

Meta's balance sheet is also not as robust as it once was. Its long-term debt of $83.7 billion is up from $58.7 billion at the end of last year. At the same time, cash and cash equivalents shrunk 57%.

There were also no share repurchases in the first six months of 2026.

It all comes down to monetizing AI

Investors received more color on Meta's plan to sell excess technical capacity to third-party customers. "We have quite a number of offers at a meaningful premium over what we paid for the compute," Zuckerberg said on the Q2 2026 earnings call. Because the industry is constrained on the supply side, the business can quickly generate revenue by offering its resources to the market.

But I think what matters most to Meta right now is how AI investments upgrade its core operations. "They're improving the experience for people using our apps, driving better performance for advertisers, and helping our teams build new experiences and ship faster," Zuckerberg added on the call.

Revenue grew 28% in Q2, an impressive figure for a company of this size. Both ad impressions and pricing jumped by double digits. And Meta's family of apps ended the quarter with 3.6 billion daily active users.

With up to $145 billion in capex on the line this year, investors should have high expectations, hoping the strong momentum continues. The stock's performance depends on the business delivering adequate returns from its AI efforts.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.