KEY POINTS
- Meta stock climbed as much as 10% after the earnings release.
- Meta plans capital expenditures of $115 billion to $135 billion in 2026, largely for AI.
- Heavy AI investment underscores rising competitive pressure from major tech rivals.
Meta Platforms Inc. reported stronger than expected fourth quarter earnings Wednesday and unveiled plans to spend as much as $135 billion on artificial intelligence infrastructure in 2026, sending Meta stock sharply higher in after hours trading.
The earnings report marked one of Meta’s most consequential financial updates in years, signaling both confidence in its core advertising business and an aggressive escalation in the global race to build advanced AI systems.
Investors responded positively to the results, even as the company acknowledged rising costs and regulatory risks.
Meta said earnings per share for the fourth quarter reached $8.88 on revenue of $59.9 billion, exceeding Bloomberg consensus estimates of $8.16 and $58.4 billion.
The Menlo Park, California based company spent $72.22 billion in capital expenditures during 2025 and now expects a sharp increase as it expands data centers, chips and networking capacity to support AI workloads.
Reality Labs, the unit responsible for virtual reality and metaverse products, generated $955 million in revenue during the quarter but posted a $6 billion operating loss.
That compared with analyst expectations for a $5.9 billion loss, highlighting the continued drag from long term bets outside Meta’s advertising core.
“Meta’s results show advertising remains a powerful cash engine, which gives the company unusual freedom to invest at massive scale,” said Angelo Zino, senior equity analyst at CFRA Research. “The risk is execution, not funding.”
The company’s AI spending plans place it alongside Amazon, Google and Microsoft, all of which are investing tens of billions of dollars annually in data center expansion.
According to Gil Luria, managing director at DA Davidson, “The industry is entering a phase where capital intensity becomes a competitive moat. Smaller players will struggle to keep up.”
| Metric | 2025 | 2026 Guidance |
|---|---|---|
| Capital expenditures | $72.22B | $115B–$135B |
| Q4 revenue | — | $59.9B |
| Q4 EPS | — | $8.88 |
Meta recently spent $14.3 billion to acquire a forty nine percent stake in Scale AI and bring its chief executive officer, Alexandr Wang, on as Meta’s chief AI officer.
“That hire signals urgency,” said Patrick Moorhead, founder of Moor Insights and Strategy. “Meta wants to control more of the AI stack.”
Regulatory pressure also looms. Federal Trade Commission spokesperson Douglas Farrar said the agency is appealing its antitrust loss because “competition issues in digital markets remain unresolved.”
Meta is considering making future AI models proprietary, a shift from its open weights approach, according to CNBC.
The company has also reduced staff in its metaverse division while redirecting resources toward AI-powered wearables.
Meta stock reflects investor optimism that strong cash flow can sustain unprecedented AI investment, even as competition, regulation and strategic pivots reshape the company’s long term trajectory.
Author’s Perspective
In my analysis, Meta’s earnings beat masks a deeper strategic inflection the company is converting advertising dominance into a capital-intensive AI moat, betting scale will determine winners.
I predict hyperscaler style AI spending will force a shift toward proprietary foundation models, ending the era of broadly open weights for frontier systems. For users and businesses, this shapes how ads, content discovery and smart wearables evolve.
NOTE! This report was compiled from multiple reliable sources, including official statements, press releases, and verified media coverage.
