Meta Surges After Earnings Beat And Bold AI Spending

Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, delivered a blockbuster set of fourth-quarter 2025 earnings, sending its stock soaring more than 6% in after-hours trading on January 28, 2026. The results, which decisively beat Wall Street expectations for both revenue and profitability, have set the stage for an even more ambitious year ahead—one defined by massive spending on artificial intelligence (AI) infrastructure and a bold vision for the future of digital engagement.

According to Seeking Alpha, Meta’s stock jumped immediately after the company posted its earnings report, reflecting investor enthusiasm for the strong numbers and upbeat forecasts. The company’s revenue for the October-December quarter surged 24% year over year, reaching $59.89 billion, up from $48.39 billion a year earlier. Earnings per share (EPS) climbed to $8.88, a 9% increase from $8.02 in the same period of 2024. Analysts had been expecting $8.21 per share on revenue of $58.5 billion, according to FactSet data cited by the Associated Press.

Meta’s robust performance was powered by its core advertising business, which continues to benefit from the company’s relentless focus on AI-driven content and targeting algorithms. CEO Mark Zuckerberg emphasized the impact of AI in the company’s quarterly update, noting that ad impressions rose 18% year over year in Q4 2025, while the average price per ad increased 6%. The company’s daily active user base reached a staggering 3.58 billion, up 7% from the previous year—a testament to Meta’s continued global reach and relevance.

“Once again, Meta surpassed analysts’ earnings expectations for the quarter, cementing its position as one of the world’s most dominant media companies,” said Debra Aho Williamson, chief analyst at Sonata Insights, as quoted by the Associated Press. “Its strong performance provides a solid foundation to continue its massive investments into AI. If there were any signs of revenue shortfall, investors would look at the capital expenditures more negatively.”

Looking ahead, Meta has set the bar even higher for its infrastructure spending. For the full year 2026, the company is forecasting capital expenditures between $115 billion and $135 billion, a figure that outpaces analyst expectations of $110 billion, according to Investing.com. Total expenses for the year are projected to land between $162 billion and $169 billion—again, above the Street’s estimate of $150 billion. Much of this increase is driven by investments in AI infrastructure, including a recently announced $6 billion agreement with Corning Incorporated to supply fiber optic cables for Meta’s expanding network of data centers.

Meta’s Reality Labs division, which oversees the company’s metaverse, smart glasses, and virtual/augmented reality projects, remains a significant investment area. CFO Susan Li told The Motley Fool that full-year losses for Reality Labs in 2026 are expected to be “similar to 2025 levels,” following more than $19 billion in spending last year. While this segment continues to operate at a loss, investors were reassured by the company’s commitment to keeping these losses stable rather than escalating further.

Despite the eye-popping spending forecasts, the market’s reaction has been largely positive. Steve Sosnick, chief strategist at Interactive Brokers, told Investing.com, “Earnings beat and so did Q1 revenue guidance. Those are the positives that are now pushing the stock higher.” For the first quarter of 2026, Meta is projecting revenue in the range of $53.5 billion to $56.5 billion, well ahead of analyst consensus of $51.4 billion. At the midpoint of this guidance, the company would be on track for 30% year-over-year revenue growth—a remarkable figure for a company of Meta’s size and maturity.

Meta’s spending spree is not without its critics. Some investors have expressed concern that the company is shifting from an asset-light model to one that could require significant borrowing to meet its ambitious infrastructure goals. However, as Sosnick noted, these worries have been largely overshadowed by the strength of Meta’s core advertising business and its ability to command higher prices for ads, even in a competitive market.

The company’s investment in AI is not just about keeping up with the competition—it’s about defining the future of digital communication and commerce. Meta has been able to scale down its Llama large language models (LLMs) to smaller, more efficient AI systems that drive targeted advertising and boost user engagement. This, in turn, has made its ad tech business even more profitable, delivering what industry observers see as a strong return on investment.

In addition to its AI push, Meta is also investing heavily in data centers and related infrastructure. The $6 billion deal with Corning Incorporated for fiber optic cables is just one example of how the company is laying the groundwork for the next era of digital connectivity. These investments are expected to support Meta’s Superintelligence Labs efforts and core business operations, ensuring the company remains at the forefront of technological innovation.

Options traders were also closely watching Meta’s earnings release. According to TheFly, pre-earnings options volume was normal, with calls leading puts by a ratio of 7 to 4. Implied volatility suggested the market was anticipating a share price move of around 6.6%, or $44.46, following the results. For context, the median move over the past eight quarters was 7.7%, indicating that investors were bracing for significant volatility but not an unprecedented swing.

Meta’s stock performance in 2025 was solid, if not spectacular. The company’s shares rose 12.7% over the year, underperforming the S&P 500’s 16.4% gain and ranking fourth among the so-called Magnificent 7 tech giants. As of January 28, 2026, Meta’s stock was up about 2% year-to-date—roughly in line with the broader market.

Net income for the fourth quarter jumped an eye-catching 740.5% quarter-over-quarter, though this was inflated by a nearly $16 billion income tax charge that hit the company’s profit in Q3 2025. Still, the underlying business momentum is undeniable. As Mark Zuckerberg put it in a statement, “We had strong business performance in 2025. I’m looking forward to advancing personal superintelligence for people around the world in 2026.”

With a price-to-earnings ratio of less than 30, Meta continues to offer what some analysts describe as a common-sense, low-risk way to profit from the ongoing AI revolution. As the company doubles down on its core strengths—massive scale, relentless innovation, and a global audience—it appears well-positioned to shape the future of digital life for years to come.

Meta’s latest results underscore the company’s unique position at the intersection of technology and society, where bold bets on AI and infrastructure are not just fueling growth, but redefining what’s possible in the digital age.