TLDR
- Meta shares climbed more than 10% after hours following better-than-expected Q4 financial results
- The company earned $22.8 billion profit on nearly $60 billion revenue, topping analyst predictions
- Meta will invest $115-$135 billion in AI infrastructure during 2026, up from $72.22 billion in 2025
- The platform’s daily active users across all apps totaled 3.58 billion in the quarter
- Reality Labs generated $955 million revenue but recorded $6 billion in operating losses
Meta turned in a winning quarter Wednesday that sent its stock soaring. The tech company reported fourth quarter earnings that crushed Wall Street’s forecasts.
The Facebook and Instagram owner earned $22.8 billion on revenue approaching $60 billion. Those numbers came in well above what analysts were expecting.
Shares spiked over 10% in after-hours trading. The market reacted enthusiastically to both the results and future outlook.
CEO Mark Zuckerberg highlighted strong business performance throughout 2025. Meta projects current quarter revenue may hit $56.5 billion.
The company’s family of apps drew 3.58 billion people daily. That user growth continues to fuel advertising revenue.
Operating costs rose 40% from the prior year period to $35.15 billion. Much of that increase stems from investments in emerging technologies.
AI Infrastructure Push Takes Center Stage
Meta unveiled plans for eye-watering capital spending in 2026. The company expects to invest between $115 billion and $135 billion this year.
That represents nearly double the $72.22 billion deployed in 2025. Most funds will build out AI data centers and computing infrastructure.
Fourth quarter capital expenditures alone reached $22.14 billion. Meta is racing against rivals Amazon, Microsoft, and Google in AI development.
The company made a $14.3 billion acquisition of 49% of Scale AI. The deal brought Scale AI CEO Alexandr Wang to Meta as chief AI officer.
Wang now oversees Meta Superintelligence Labs. Zuckerberg says he’s focused on developing personal superintelligence for users worldwide.
Analysts believe the massive spending will eventually improve ad targeting and create new revenue streams. But profits from AI remain distant.
Virtual Reality Unit Drains Resources
Reality Labs continues hemorrhaging cash despite revenue growth. The division pulled in $955 million but posted $6 billion in losses.
Those losses slightly exceeded the $5.9 billion analysts had forecast. The virtual and augmented reality business has never turned a profit.
Meta recently cut jobs in its metaverse operations. The company is redirecting some resources toward wearable devices.
Ray-Ban smart glasses represent a key product focus. Meta partnered with eyewear maker EssilorLuxottica on the AI-powered glasses.
Zuckerberg believes smart glasses will eventually supplant smartphones. He’s betting the devices become the dominant computing platform.
Most analysts see more potential in wearables than the metaverse. The glasses could deliver targeted ads and new user experiences.
Competition and Setbacks Mount
Meta’s AI rollout hasn’t gone smoothly. The company faces delays releasing its Llama 4 Behemoth model.
Reports indicate Meta may abandon its open-weights AI strategy. The company could make its next major model proprietary instead.
That would prevent outside developers from accessing and improving the technology. CNBC first reported the potential strategic shift.
Google has seized the AI lead with its Gemini 3 model. The search company now outpaces Meta and even ChatGPT creator OpenAI.
Meta entered 2025 as an AI frontrunner but competition has intensified. The company hopes its spending surge will help regain momentum.
A trial accusing Meta of harming young users through addictive features started in Los Angeles. The lawsuit claims a 19-year-old woman suffered mental health damage from social media use.
Zuckerberg is scheduled to testify as a witness. Snap and ByteDance settled similar claims, leaving Meta and YouTube facing trial.
The FTC said it will appeal after losing an antitrust case against Meta. Regulators claimed the company bought Instagram and WhatsApp to eliminate competitors.
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