Meta reported a loss of 20 million daily active users across its family of apps in the first quarter of 2026, marking a rare decline for the social media giant. The drop comes as CEO Mark Zuckerberg announced plans to increase AI investment by an additional $10 billion this year, raising total capital expenditure to $60–$65 billion.
During an earnings call on Wednesday, Meta revealed that its "Family daily active people" metric — which counts unique users across Facebook, Instagram, WhatsApp, and Messenger — fell to 3.18 billion from 3.20 billion in the previous quarter. The company attributed the decline to seasonal effects and increased competition from platforms like TikTok.
Despite the user dip, Meta's revenue grew 12% year-over-year to $42.3 billion, beating analyst expectations. However, the company's stock fell 4% in after-hours trading as investors expressed concern over the widening gap between its user contraction and its aggressive AI spending.
Zuckerberg defended the strategy, stating that AI is central to Meta's future. "We're investing heavily to build the most advanced AI systems in the world, which will unlock new products and revenue streams," he said. The company is focusing on generative AI features for its apps, including AI-powered chatbots and content creation tools.
The earnings report also highlighted a 15% increase in advertising revenue, driven by improved AI-driven ad targeting. Meta now expects full-year 2026 capital expenditures between $60 billion and $65 billion, up from its previous forecast of $50–$55 billion.
Analysts remain divided. Some see the user decline as a warning sign, while others believe Meta's AI investments could pay off long-term. "The user loss is concerning, but Meta's core business remains strong," said Dan Ives of Wedbush Securities. "The real question is whether AI will deliver the growth Zuckerberg promises."