New York, Jan 27, 2026, 09:35 (EST) — Regular session.
- Meta shares jumped roughly 2% early Tuesday following a Corning supply agreement linked to AI data centers
- Wall Street is gearing up for updates on 2026 capital spending and expenses when Wednesday’s results hit.
- The EU tightens compliance rules for WhatsApp “channels” as part of its Digital Services Act enforcement
Meta Platforms (META.O) jumped about 2% to $672.36 early Tuesday after the Facebook parent struck a deal to pay Corning up to $6 billion for fiber-optic cables that will support AI data centers. Corning plans to ramp up production at its Hickory, North Carolina plant, where Meta will be a key customer. CNBC reported the contract payments extend through 2030. “Together with Meta, we’re strengthening domestic supply chains,” said Corning CEO Wendell Weeks. Reuters
The deal arrives alongside Meta’s earnings on Wednesday, shifting the debate from ad demand to the hefty costs of chips, power, and infrastructure. The key question: can Meta keep dumping cash into AI and still grow profits fast enough to support its valuation?
Big Tech earnings this week will reveal if last year’s AI-fueled surge can withstand another wave of spending. Microsoft and Meta face pressure to prove their costly AI investments are paying off, Reuters reported. Analyst forecasts and options still signal solid revenue growth for Meta, though rising costs from hiring and infrastructure could weigh on profits. David Wagner, a Big Tech investor at Aptus Capital Advisors, cautioned that “the first-mover advantage doesn’t always win the marathon.” Reuters
Calls from analysts have grown louder ahead of the earnings release. On Monday, Rothschild & Co Redburn’s James Cordwell upgraded Meta to Buy, raising his price target to $900 from $740. He argued that the stock doesn’t fully capture Meta’s long-term earnings potential, even as CEO Mark Zuckerberg seems to be back in “founder mode” with AI investments. Cordwell noted, “the upside potential far outweighs any near-term risks.” Meanwhile, TipRanks data showed options traders are bracing for about a 6.8% move in either direction post-results. TipRanks
Traders see it clearly: as data centers ramp up for AI workloads, wiring and connectivity costs spike. Fiber links shuttle data between servers and chips, and when expansion speeds up, suppliers ride the momentum.
Still, the debate over spending refuses to fade. Investors demand a clearer link between Meta’s AI investments and its main ad revenue—specifically, whether improvements in targeting, recommendations, and automation will push ad prices up and sustain growth.
The downside risks are intensifying. European regulators have labeled WhatsApp’s “channels” feature a “very large platform” under the Digital Services Act. This means Meta must take extra measures to address illegal and harmful content, with a compliance deadline set for mid-May 2026. The move increases both costs and legal uncertainty, just as Meta is already pouring money into the business. Reuters
Rivalry is heating up over AI features linked to ads and search, as competitors rush to pack new tools into consumer apps and marketing platforms. Even if Meta reports a strong quarter, its stock could still falter if guidance signals another jump in spending.
Meta is set to release its fourth-quarter and full-year 2025 results after Wednesday’s closing bell, with a conference call scheduled for 4:30 p.m. ET. Investors will zero in on the company’s 2026 outlook for expenses and capital expenditures—particularly spending on data centers and equipment—and watch for early indications that AI investments are driving revenue growth rather than just pushing costs higher.
