MENLO PARK, California, Jan 29, 2026, 07:34 (PST)
- Meta projects capital spending between $115 billion and $135 billion for 2026, a significant jump from $72.22 billion in 2025.
- Revenue for the fourth quarter jumped 24% to $59.89 billion, with net income hitting $22.77 billion.
- Meta forecasted first-quarter revenue between $53.5 billion and $56.5 billion, while projecting 2026 expenses to range from $162 billion to $169 billion.
On Wednesday, Meta Platforms announced a massive capital expenditure plan for 2026, with up to $135 billion allocated to expanding its AI infrastructure. CEO Mark Zuckerberg is doubling down on what he terms “superintelligence.” Reuters
Scale is crucial now as Big Tech’s AI battle moves beyond flashy demos to the gritty reality of data centers, chips, and power. Investors are watching the costs closely, seeing the spending less as bold ambition and more as a measure of discipline.
Meta is relying on its ad engine to fund the expansion. Its latest earnings reveal that ad revenue is still climbing quickly enough to offset increased expenses—for the moment—despite shrinking operating margins.
Meta reported a 24% jump in fourth-quarter revenue, hitting $59.89 billion. Net income rose to $22.77 billion, translating to $8.88 per share. The company saw total costs and expenses surge 40% to $35.15 billion, while capital expenditures for the quarter reached $22.14 billion. Atmeta
Meta expects revenue between $53.5 billion and $56.5 billion for the current quarter. Looking ahead to full-year 2026, the company projects expenses ranging from $162 billion to $169 billion, attributing the bulk of the rise to infrastructure costs—such as third-party cloud services, depreciation, and operating expenses. Employee compensation follows closely, fueled by ongoing hires in technical roles.
Meta’s capex forecast for 2026 targets $115 billion to $135 billion, covering cash spent on long-term assets like servers and data centers, plus principal payments on finance leases. The company attributes this spending surge to its Meta Superintelligence Labs initiatives and ongoing core operations.
During the earnings call, CFO Susan Li mentioned that Meta anticipates capacity constraints lasting well into 2026, Reuters reported. To speed up adding computing power, Meta has increasingly relied on external cloud resources, striking deals with providers like Alphabet’s Google to handle some of its spending.
Most of Meta’s earnings continue to flow from its “Family of Apps” division — that’s Facebook, Instagram, WhatsApp, and Messenger. In Q4, this segment raked in $58.94 billion in revenue, generating $30.77 billion in operating income. By contrast, Reality Labs brought in just $955 million in revenue but suffered a $6.02 billion operating loss, according to the results.
Wall Street’s concern is straightforward: spending might outpace growth. “If there were any signs of revenue shortfall, investors would look at the capital expenditures more negatively,” said Debra Aho Williamson, chief analyst at Sonata Insights. After-hours trading saw shares jump 10.9% to $741.88. Apnews
Some investors say the market continues to value Meta based on its ad revenue, not potential AI gains. John Belton, portfolio manager at Gabelli Funds, described Meta’s “valuation … not that demanding,” but warned that most returns still stem from its core business, Reuters reported.
But the bet carries risks. A spike in capex could tighten margins if ad demand cools. Meanwhile, “superintelligence” is still theoretical — not something with a clear release date. Meta also warned of legal and regulatory challenges in the EU and U.S., including scrutiny over youth issues and upcoming U.S. trials this year that might result in a significant loss.
Big Tech is ramping up spending. Microsoft, which also released its earnings Wednesday, saw capital expenditures surge 66% in the December quarter. Still, its stock dipped after hours as cloud growth just barely beat expectations, Reuters noted. Meta’s forward valuation remains lower than several major competitors—trading at 22.2 times next-12-month earnings estimates, compared to 29.5 for Alphabet and 27.1 for Microsoft, according to LSEG data.
