NEW YORK, Jan 29, 2026, 16:10 EST — After-hours
- Meta shares surged roughly 11% following better-than-expected earnings and a strong outlook for the first quarter
- Company projects 2026 capex between $115 billion and $135 billion, with expenses ranging from $162 billion to $169 billion
- Investors debate when AI investments will start paying off amid closer scrutiny of tech budgets
Shares of Meta Platforms, Inc. (META) jumped roughly 10.7% late Thursday, closing at $740.20 and pushing the Facebook parent company’s market cap near $1.84 trillion. The stock hit an intraday peak of $741.63 after starting the day at $738.00.
This shift went beyond just one company. Investors are now making a clearer distinction between AI investments that drive solid growth and those met with indifference—and Meta’s guidance landed squarely in the gray area between the two.
Meta is warning shareholders to brace for a sharp rise in spending on data centers and computing this year as it pushes the idea of “superintelligence” — a future point where machines might surpass human thought. The key issue: can its main ad business fund this without margins taking a serious hit?
Meta posted fourth-quarter revenue of $59.89 billion, marking a 24% increase, with earnings per share hitting $8.88, the company announced. Advertising revenue climbed 24% to $58.14 billion. For the first quarter, Meta projects revenue between $53.5 billion and $56.5 billion. The company also set its 2026 total expenses forecast at $162 billion to $169 billion, with capital expenditures — covering data centers and servers — expected to range from $115 billion to $135 billion. 1
“This is going to be a big year for delivering personal superintelligence,” CEO Mark Zuckerberg told analysts as Meta outlined plans relying more on third-party cloud services and new data centers. CFO Susan Li warned of capacity constraints lasting through much of 2026. Meanwhile, John Belton, a portfolio manager at Gabelli Funds, said Meta’s valuation “is really not that demanding,” highlighting ongoing returns from its core business. 2
The broader market struggled on Thursday, with Wall Street’s key indexes dropping amid concerns over rising AI spending. Microsoft took a hit following its cloud update, while Meta emerged as a bright spot in the communications services sector. 3
Meta’s ad engine carried the load once more this quarter. Ad impressions climbed 18%, and the average price per ad edged up 6%, the company reported. Meanwhile, family daily active users hit an average of 3.58 billion in December.
Rising expenses are squeezing margins and testing patience. Meta’s operating margin dropped to 41% this quarter from 48% a year ago, driven by higher costs. Meanwhile, Reality Labs recorded a $6.02 billion operating loss.
Meta also highlighted legal and regulatory challenges, pointing to adjustments it said were coordinated with the European Commission for its Less Personalized Ads feature. A drop in ad demand—or stricter regulations—would tighten the space available to support a capital expenditure plan that far exceeds last year’s $72.22 billion.
Traders want to see if the extra AI capacity quickly boosts ad tools and messaging revenue, rather than just driving higher depreciation costs. Apple reports after the bell Thursday, followed by the U.S. producer price index release at 8:30 a.m. EST Friday. Amazon is set to report earnings Feb. 5 after the market closes. 4 5 6
