New York, March 23, 2026, 10:32 EDT
Meta Platforms bounced back about 1.9% to $604.66 in early U.S. hours Monday, recovering from a session low of $585.40. A wave of investor commentary suggested the selloff had outpaced any visible slowdown at the Facebook parent. Shares have faced pressure despite Meta posting robust fourth-quarter ad growth and guiding for another strong period.
This question has taken on new urgency as Meta looks to bankroll what could be one of big tech’s most ambitious AI expansions using digital ad revenue. Up to now, investors have supported Meta’s spending spree, but the recent pullback signals the market is now demanding more concrete evidence that higher costs and pinched margins can still yield sustained profit growth.
The gap’s only widened since the weekend. IndexBox reported Meta shares losing ground even with robust fourth-quarter ad revenue; Simply Wall St pegged Friday’s $593.66 finish under a “narrative fair value” of $723.11; then, Monday, a Motley Fool column claimed sentiment around the stock had turned overly negative. IndexBox
Meta’s figures leave little doubt at this point. The company pushed fourth-quarter revenue up 24% to $59.89 billion, with advertising pulling in $58.14 billion. Operating income landed at $24.75 billion. For the first quarter, Meta is guiding revenue between $53.5 billion and $56.5 billion—better than what analysts penciled in, according to its own release and Reuters.
Chief Executive Mark Zuckerberg called Meta’s 2025 business performance “strong” during the company’s results announcement. On the earnings call, Zuckerberg described 2026 as shaping up to be a “big year” for what Meta labels “personal superintelligence”—the company’s shorthand for next-gen AI. Finance chief Susan Li highlighted that advertisers are already reacting to “ad performance improvements,” adding that most of the company’s expected expense growth will be tied to infrastructure. Meta Investor
The bill’s massive. Meta is projecting capital expenditures for 2026 between $115 billion and $135 billion—money earmarked for data centers, servers, and other big-ticket items. Total expenses are forecast at $162 billion to $169 billion. In the fourth quarter, costs and expenses soared 40%, outpacing revenue growth by a wide margin. Operating margin took a hit, dropping to 41% from 48% a year ago.
Meta isn’t standing out here. Amazon’s $200 billion capital-spending plan is on the table, and Alphabet is also ramping up, stoking a broader debate about how quickly AI investments might pay off. The key distinction for Meta: it’s still leaning on its advertising business to foot the bill, while cloud revenue remains the driver for others.
There’s still a pocket of optimism out there. John Belton, portfolio manager at Gabelli Funds, put it plainly to Reuters back in January: “the valuation is really not that demanding.” He pointed out, “the returns are enormous today,” despite those hefty figures still mostly fueled by Meta’s main ad business—not the company’s still-developing AI bets. Reuters
The bullish scenario has its snags. Li noted Meta expects capacity constraints to drag well into 2026. Reality Labs barely managed $955 million in fourth-quarter revenue, but turned in a staggering $19.19 billion operating loss for 2025. Then there’s regulatory pressure: the company has cautioned about serious legal risks in both Europe and the U.S. Simply Wall St, for its part, cited liability issues and poor returns from Reality Labs as reasons to stay cautious on valuation.
The market’s caught in a tug-of-war: Meta keeps posting rapid growth, yet it’s pressing shareholders to shoulder one of the sector’s largest AI spending sprees. Monday saw the stock bounce as some investors edged back in after the recent selloff. Now, the real question—does ad revenue keep up with Zuckerberg’s aggressive AI outlays?
