Banking giant downgrades Meta stock on massive earnings plunge

JPMorgan’s (NYSE: JPM) reaction to Meta Platforms’ (NASDAQ: META) latest earnings report appears largely in line with the actual results achieved in the first quarter (Q1) of 2026, but also somewhat more measured than the market’s.

Specifically, analyst Doug Anmuth assessed positively the unveiled 33% year-over-year (YoY) revenue growth, while praising continued efforts at improving monetization. The Wall Street expert was, similarly, positive toward the rollout of the Muse artificial intelligence (AI) model for Meta AI.

Nonetheless, Anmuth also commented on the mounting competition from other mega-cap blue-chip technology giants such as Google (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) – whose earnings featured impressive cloud growth – while also noting that Mark Zuckerberg’s firm is increasing its capital expenditure to the point that cash flow will go $4 billion into the negative in 2026 and as much as $24 billion in 2027.

Under the circumstances, JPMorgan reduced its Meta stock price target for the next 12 months from $825 to $725 and the rating from ‘Overweight’ – ‘Buy’ – to ‘Neutral.’

Elsewhere, considering Meta Platforms reported substantial growth and a double beat in Q1, 2026, the $10 billion increase in expected CapEx to between $125 billion and $145 billion does much to explain the investor reaction.

In fact, former hedge fund manager and popular TV stock analyst Jim Cramer reacted to the earnings with a simple X post in which he stated:

Simultaneously, the fact that Meta’s revenue came in at $56.31 billion – and $55.45 billion was expected – and earnings per share (EPS) at $7.31 adjusted – above the $6.79 estimated – does much to explain why, even after the downgrade, JPMorgan still expects the equity to rally 8.35% from its latest closing price and 19.27% from its press time price.

Looking at Meta’s stock performance in the extended session, investors’ reaction appears to have been overwhelmingly negative. Specifically, after closing at $669.12 on April 29, the shares plummeted 9.09% in the subsequent extended session and are, at press time on April 30, changing hands at $607.88.

Notably, while the latest crash has not taken the equity back to 2026 lows, it still means Meta stock will be red year-to-date (YTD) on Thursday morning, given it started January at about  $650.

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