Meta shares slide as tech giant hikes AI spending forecast, warns of youth social media backlash

Meta Platforms raised its annual capital spending forecast on Wednesday, plowing billions more into artificial intelligence infrastructure even as it grapples with possible losses from a global youth social media backlash.The Facebook parent projects 2026 capital expenditure between $125 billion and $145 billion, compared with its prior forecast of $115 billion to $135 billion.Shares of the company fell more than 6% in extended trading.The company also warned that legal and regulatory blowback in the European Union and the US “could significantly impact our business and financial results,” after years of mounting criticism about children’s safety on social media.“We continue to see scrutiny on youth-related issues and have additional trials scheduled for this year in the US, which may ultimately result in a material loss,” it said.Meta is facing a rising number of teen social media bans around the globe, as well as thousands of court cases by individuals, municipalities, states and school districts alleging it designed its platforms to be addictive and harmful to children.More court cases are due in the coming months, including a second part of a New Mexico trial and a California case expected to test claims central to nearly 2,000 similar lawsuits filed by US school districts.Matt Britzman, an analyst at Hargreaves Lansdown, said Meta’s higher capital spending spooked investors but is likely overblown as it reflects more expensive memory prices rather than changes to Meta’s investment plan.Meta reported first-quarter revenue of $56.31 billion, beating the LSEG-compiled analysts’ average estimate of $55.45 billion.It expects second-quarter revenue of $58 billion to $61 billion, largely in line with estimates of $59.5 billion.Family daily active people (DAP), a metric Meta uses to track unique users who open any one of its apps in a day, rose 4% in the first quarter from a year earlier to 3.56 billion.The results come weeks after Reuters rep...