Meta, the parent company of Facebook and Instagram, has just released its highly anticipated fourth-quarter earnings report, and the numbers are turning heads across Wall Street. The tech giant not only exceeded analyst expectations on both revenue and earnings, but it also unveiled a bold—and, some say, risky—plan to dramatically ramp up spending on artificial intelligence infrastructure in the years ahead. The move comes as Meta faces mounting pressure from investors, fierce competition from other technology behemoths, and a fast-changing regulatory landscape that could reshape the industry.
According to finance.yahoo.com and Bloomberg, Meta posted earnings per share (EPS) of $8.88 on revenue of $59.9 billion for the fourth quarter of 2025. These results outpaced the consensus estimates of $8.16 EPS and $58.4 billion in revenue, marking a robust improvement over last year’s performance, when Meta reported $8.02 EPS and $48.4 billion in revenue for the same period. Meta’s strong showing comes despite a turbulent year for its stock, which has only increased by 4% over the past twelve months, a sharp contrast to Google’s 66% surge and Amazon’s modest 1.8% gain.
But the real headline-grabber wasn’t just Meta’s earnings—it was the company’s aggressive capital expenditure plans. Meta revealed that it spent $72.22 billion in 2025 and is now projecting an eye-popping $115 billion to $135 billion in capital expenditures for 2026. This is a significant leap from its previous guidance, which had forecasted 2025 spending in the range of $70 billion to $72 billion. For the fourth quarter alone, Meta’s capital spending reached approximately $21.9 billion, up from $14.4 billion in the same quarter last year.
Why the surge in spending? The answer lies in Meta’s determination to stay ahead in the global race to build artificial intelligence supercomputers and data centers. The company has been pouring resources into next-generation AI models, infrastructure, and hardware. In a particularly notable move, Meta spent $14.3 billion to acquire a 49% stake in Scale AI, a leading AI data labeling and infrastructure company. As part of the deal, Scale AI’s CEO, Alexandr Wang, has joined Meta as Chief AI Officer, tasked with leading Meta’s Superintelligence Labs and spearheading its AI initiatives.
Despite these investments, Meta has encountered its share of challenges. The company has faced delays in rolling out its much-anticipated Llama 4 Behemoth AI model, which has frustrated some industry watchers and investors. There are also reports that Meta is considering a significant strategic shift: moving away from its current open-weights AI model strategy—which allows third-party developers access to its models—toward a more proprietary approach. Such a move would consolidate Meta’s control over its AI innovations but could also limit collaboration and transparency in the broader AI research community.
Competition in the AI space is nothing short of fierce. Amazon, Google, and Microsoft are all investing billions of dollars in their own AI data centers and infrastructure. Google, in particular, has pulled ahead in the field with its Gemini 3 model, which is now widely regarded as the market leader. This has helped propel Google’s stock to new heights, while Meta’s more modest gains have left some investors questioning whether the company’s massive spending will pay off in the long run.
Meta’s Reality Labs division, which focuses on metaverse-related technology and AI, generated $955 million in revenue for the fourth quarter—just shy of the $959 million analysts had expected. However, the division posted an operating loss of $6 billion, slightly higher than the anticipated $5.9 billion. These losses reflect Meta’s continued heavy investment in research and development, particularly in long-term innovations that may not yield immediate financial returns.
In an effort to reallocate resources and double down on its AI ambitions, Meta has reduced its workforce in the metaverse division. Some of the savings are being funneled into new wearable technologies, including AI-powered smart glasses. These initiatives are designed to help Meta capitalize on emerging hardware markets and maintain its edge in the rapidly evolving tech landscape.
But it’s not just competition and investment that Meta has to worry about. The company is also grappling with growing regulatory scrutiny on multiple fronts. Australia has already implemented a ban on social media access for children under 16, and France is considering similar regulations. In the United States, the Federal Trade Commission is appealing a court loss in its antitrust suit against Meta regarding the company’s acquisitions of Instagram and WhatsApp. These regulatory challenges add another layer of uncertainty to Meta’s future, as governments around the world debate how to rein in the power and influence of big tech companies.
Despite these hurdles, Meta’s leadership remains optimistic. The company’s outsized investments in AI are seen as a bet on the future—a gamble that, if successful, could cement Meta’s position at the forefront of the next technological revolution. “Our commitment to driving the next wave of technology innovation is unwavering,” a Meta spokesperson said. “With $135 billion earmarked for AI infrastructure by 2026, we are building the foundation for the future of artificial intelligence and digital experiences.”
Still, the stakes are high. Meta’s stock declined over 12% after its third-quarter earnings announcement, reflecting investor concerns about the company’s runaway capital expenditures and the uncertain payoff of its AI strategy. The company’s stock also dipped 0.4% in premarket trading on January 28, 2026, as news of its ambitious spending plans and ongoing AI model delays circulated.
Meanwhile, the broader industry is watching closely. Meta’s decision on whether to keep its next major AI model proprietary or open could have far-reaching implications for the AI ecosystem. If Meta chooses to close off its models, it could spark a new era of competition—and perhaps even fragmentation—in the AI research community.
As Meta prepares for what promises to be a pivotal year, investors, regulators, and rivals alike are all asking the same question: Can the company’s massive bets on artificial intelligence pay off, or will the risks outweigh the rewards? For now, one thing is clear—Meta is all-in on AI, and the world is watching.