Meta Stock: Earnings Beat Triggers Double-Digit Share Rally

TLDR

• Meta delivered Q4 earnings of $8.88 per share on $59.9 billion revenue, surpassing analyst estimates
• Stock price jumped over 10% in after-hours trading following the earnings announcement
• Company plans AI infrastructure spending of $115-$135 billion in 2026, nearly double 2025 levels
• Meta’s apps drew 3.58 billion daily active users during the quarter
• Reality Labs unit posted $6 billion in losses against $955 million revenue

Meta reported fourth quarter results Wednesday that beat Wall Street predictions. The social media company posted earnings of $8.88 per share on revenue of $59.9 billion.

Analysts had projected earnings of $8.16 per share and revenue of $58.4 billion. The company generated $22.8 billion in profit during the quarter.

Share price climbed more than 10% in extended trading. Investors responded positively to the financial performance and forward guidance.

Meta Platforms, Inc., META

Meta expects current quarter revenue could reach $56.5 billion. The company’s apps attracted 3.58 billion daily users worldwide.

CEO Mark Zuckerberg described 2025 as a year of strong performance. Operating expenses increased 40% year-over-year to $35.15 billion.

Record AI Spending Plans Announced

Meta outlined plans to spend between $115 billion and $135 billion on capital expenditures in 2026. That compares to $72.22 billion spent throughout 2025.

The investment will fund AI infrastructure including data centers and computing systems. Fourth quarter capital spending alone reached $22.14 billion.

Meta joins Amazon, Google, and Microsoft in a race to build AI capabilities. The company recently acquired 49% of Scale AI for $14.3 billion.

Scale AI CEO Alexandr Wang joined Meta as chief AI officer. He now leads Meta Superintelligence Labs.

Zuckerberg stated he looks forward to advancing personal superintelligence globally in 2026. The company views AI as central to future revenue growth.

Reality Labs Losses Continue

The Reality Labs division brought in $955 million in revenue but lost $6 billion. Analysts had expected a $5.9 billion operating loss.

Meta’s virtual and augmented reality unit has consistently posted losses. The company recently reduced headcount in its metaverse operations.

Some savings will redirect toward wearables including AI-powered smart glasses. Meta partnered with EssilorLuxottica on Ray-Ban smart glasses.

Zuckerberg predicts smart glasses will become the next major computing platform. He believes they could eventually replace smartphones entirely.

Analysts see potential for improved advertising efficiency through wearables technology. However, profitability remains years away.

AI Development Faces Challenges

Meta encountered delays with its Llama 4 Behemoth AI model. The company may switch to a proprietary model for its next release.

That would abandon the open-weights strategy allowing third-party developers access. CNBC reported Meta is considering this strategic shift.

Google’s Gemini 3 model currently leads the AI race. The search giant has moved ahead of both Meta and OpenAI.

Meta started 2025 as a frontrunner but faces increased competition. The company spent $14.3 billion bringing Wang aboard to accelerate AI development.

A landmark trial accusing Meta of addicting young users to social media began in Los Angeles. The case involves allegations of mental health harm to a 19-year-old woman.

Zuckerberg will testify during the proceedings. ByteDance and Snap settled before trial, leaving Meta and YouTube as defendants.

The FTC announced it will appeal its antitrust case loss against Meta last week. The case alleged Meta purchased Instagram and WhatsApp to eliminate competition.

Australia implemented a social media ban for users under 16. France is considering similar legislation targeting youth social media access.

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