Shares of Meta Platforms fell sharply on April 29 in the US in extended trading after the company raised its capital expenditure forecast and flagged growing legal and regulatory risks tied to its social media platforms.

According to a Reuters report, the company has increased its projected capital spending for 2026 to between $125 billion and $145 billion, up from its earlier estimate of $115 billion to $135 billion. The move signals Meta’s intent to invest heavily in artificial intelligence infrastructure, even as investor sentiment remains cautious.

The parent company of Facebook and Instagram said the higher spending would support its long-term AI ambitions, but the announcement appeared to unsettle markets, with shares dropping more than 6 percent after hours. Analysts noted that while the increased investment reflects the rising cost of AI infrastructure, it has also raised concerns about near-term profitability.

Meta also warned that mounting legal and regulatory scrutiny in both the United States and the European Union could significantly impact its business and financial performance. The company pointed to ongoing concerns around child safety and youth engagement on social media, issues that have drawn criticism from policymakers and regulators globally.

The company is currently facing a wave of lawsuits, including cases brought by individuals, school districts, and state authorities, alleging that its platforms are designed in ways that can be harmful to children. Several key trials are scheduled in the coming months, including proceedings in New Mexico and California that could influence thousands of similar cases.

Adding to the pressure, Meta reported its first-ever quarterly decline in Daily Active People, a key metric tracking usage across Facebook, Instagram, Messenger and WhatsApp. The company attributed the dip to internet disruptions in Iran and restrictions on WhatsApp access in Russia. Despite this, daily active users still grew 4 percent year-on-year to reach 3.56 billion in the first quarter.

Market experts suggested that investor reaction to the spending increase may be somewhat exaggerated. Matt Britzman, an analyst at Hargreaves Lansdown, said the higher capital expenditure is partly driven by rising costs of memory and infrastructure rather than a fundamental shift in Meta’s broader investment strategy.

The developments underline the balancing act Meta faces as it pushes aggressively into AI while navigating intensifying regulatory scrutiny and evolving user dynamics across global markets.