Meta faces AI ad ROI test

Meta reports first-quarter 2026 earnings on Wednesday, April 29, with investors zeroed in on whether its artificial-intelligence ad tools are paying for a much bigger infrastructure bill. (investor.atmeta.com) Wall Street expects about $55.5 billion in revenue and roughly $6.7 in earnings per share for the quarter, according to recent analyst previews ahead of the release. (msn.com) (marketbeat.com) The pressure point is spending. Meta said in January that 2026 capital expenditures would land between $115 billion and $135 billion, up from $72.22 billion in 2025. (investor.atmeta.com 1) (investor.atmeta.com 2) Meta’s case to investors is that better recommendation systems and ad targeting can squeeze more money out of the same apps. In the fourth quarter, ad impressions rose 18% and average price per ad rose 6%. (investor.atmeta.com) That ad engine still dwarfs everything else inside the company. Meta generated $59.89 billion in fourth-quarter revenue, and nearly all of it came from the Family of Apps business rather than Reality Labs. (investor.atmeta.com) The spending jump is tied to data centers, chips, cloud capacity and what Meta has called support for its “Meta Superintelligence Labs efforts and core business.” (investor.atmeta.com 1) (investor.atmeta.com 2) That leaves this report less about whether Meta can grow, and more about whether growth is efficient enough. The same company that posted a 41% operating margin for 2025 is now asking shareholders to accept much heavier upfront costs. (investor.atmeta.com) Meta has already shown that artificial intelligence can help sell more ads. The open question on April 29 is whether management can show those gains are scaling fast enough to defend a 2026 capex plan that could approach nearly double last year’s level. (investor.atmeta.com) (msn.com)