Technology & Science
Meta Posts $22.8B Q4 Profit, Signals $115-135B AI CapEx for 2026
A better-than-expected Q4 print coupled with management’s vow to more than double AI infrastructure spending in 2026 sent Meta shares up roughly 8% after hours.
Focusing Facts
- Q4 2025 earnings: $59.9 billion revenue and $8.88 EPS versus $58.35 billion and $8.19 consensus.
- CFO Susan Li guided 2026 capital expenditures to $115-135 billion, up from $72.2 billion in 2025.
- Reality Labs racked up a $19.2 billion operating loss for full-year 2025.
Context
Silicon Valley has seen this movie before: in 1993-95, Amazon and others ploughed cash into bare-metal datacentres that looked ruinous until cloud margins appeared a decade later. Meta’s proposed $115-135 billion AI build-out echoes IBM’s 1964 System/360 gamble—an all-in bet on a still-forming computing paradigm—and the early-2000s telecom fiber glut that left investors nursing write-offs before demand caught up. The announcement embodies two long arcs: (1) the secular shift from user-generated content toward machine-generated experiences, and (2) the concentration of compute power—and therefore corporate power—in a handful of trillion-dollar firms. Whether this moment marks the birth of a new platform or another CapEx bubble will matter less next quarter than over the next century, where the precedent being set is that global consumer attention can justify nation-state-scale infrastructure spending by private entities—a dynamic with profound economic and regulatory ramifications.
Perspectives
Wall Street analyst and investor-focused media
e.g., TheStreet, Investing.com, Channels Television — They frame Meta’s blow-out earnings and escalating AI investment as a bullish catalyst, arguing the company is building a moat that justifies higher price targets and continued share outperformance. Coverage leans toward nurturing upbeat market sentiment, echoing sell-side research and spotlighting upside targets while downplaying the sheer scale of spending and unresolved legal risks, which may align with outlets’ incentives to attract retail-trader readership and advertiser dollars tied to trading activity.
Cost-conscious business press highlighting margin pressure
e.g., MarketBeat, FortuneIndia — They warn that Meta’s 2026 capex guidance north of $100 billion and swelling Reality Labs losses could squeeze margins and spark a negative share reaction if spending outruns returns. By stressing worst-case scenarios on expenses and stock downside, these outlets cultivate a sober, risk-focused narrative that can draw cautious investors but may under-represent Meta’s core ad strength and historically rapid revenue growth.
Tech-culture sites skeptical of AI-generated content hype
e.g., TweakTown — They question Zuckerberg’s vision that AI-generated videos and images will be the next social-media wave, noting user backlash to "AI slop" and the conspicuous silence on still-bleeding metaverse bets. Skepticism toward large-platform promises resonates with a tech-enthusiast audience fatigued by hype cycles, but may over-index on anecdotal user gripes and understate the financial momentum AI already delivers to Meta’s ad business.