New York, Jan 29, 2026, 04:46 (EST) — Premarket
- Shares of Meta jumped almost 7% in early Frankfurt trading following the company’s strong Q4 results and positive revenue forecast
- Meta boosted its 2026 capex forecast to $115-$135 billion, stepping up investment in AI infrastructure
- Investors are balancing strong ad performance with climbing costs and mounting legal and regulatory challenges
Shares of Meta Platforms jumped nearly 7% in early Frankfurt trading Thursday, following the company’s forecast of first-quarter revenue that outpaced Wall Street estimates. The Facebook and Instagram parent also boosted its 2026 capital spending plan to accelerate investment in artificial intelligence. Reuters
The reaction is crucial as markets grow increasingly wary of endless AI spending. Investors demand growth, yes, but they’re also focused on how fast that growth translates into profit—not just on rising costs for servers and electricity.
Meta’s updated spending forecast puts that trade-off under the microscope. The company is relying heavily on advertising—its main revenue driver—to bankroll a significantly bigger expansion. Any hiccup in ad revenue could quickly shift the focus onto its rising expenses.
Meta reported a 24% jump in fourth-quarter revenue, hitting $59.89 billion, with diluted EPS climbing to $8.88. The company projects first-quarter revenue between $53.5 billion and $56.5 billion. For 2026, it expects total expenses to range from $162 billion to $169 billion, including capital expenditures of $115 billion to $135 billion, primarily for long-term assets like data centers. SEC
Shares jumped $73.15, climbing 10.9% to $741.88 in after-hours trading Wednesday. “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. AP News
On a recent analyst call, CEO Mark Zuckerberg described 2026 as “a big year for delivering personal superintelligence,” Meta’s term for AI that could surpass humans in a range of tasks. CFO Susan Li flagged ongoing capacity constraints expected through much of next year. Investor John Belton from Gabelli Funds weighed in, saying Meta’s valuation “is really not that demanding” considering the returns from its core business. Reuters
Meta has informed investors that its largest expenses come from infrastructure — covering third-party cloud services, depreciation, and operating costs — as well as salaries for technical staff. The company is also working hard to maintain advertiser spending amid fierce competition from TikTok, YouTube Shorts, and other short-video platforms.
Margins have already squeezed as spending ramps up. Meta’s operating margin — profit after operating costs as a percentage of revenue — dropped to 41% from 48% a year ago, despite steady ad demand.
In Europe, brokers raised price targets following the earnings, pushing the rally further in early trading. Yet the focus has already moved beyond the reported quarter to concerns over how much cash Meta will burn before AI products start generating significant revenue.
One risk is that the AI rollout drags on, pushing Meta’s costs up and trimming its free cash flow — the money left after business operations and capital expenses. Legal troubles loom as well: TikTok recently settled a youth social media addiction lawsuit, while Meta and YouTube face a trial set to start soon in Los Angeles, where Zuckerberg is slated to testify. Reuters
Traders are eyeing if the after-hours rally can sustain itself into the U.S. open, as attention shifts to whether Big Tech’s earnings will continue to highlight cautious AI spending. Apple is set to release its results after Thursday’s close. Alphabet plans its earnings call for Feb. 4, and Amazon is due to report on Feb. 5. Nasdaq
