MENLO PARK, Calif., Jan 28, 2026, 13:33 (PST)
- Meta forecast 2026 capex of $115 billion to $135 billion as it ramps AI infrastructure.
- Fourth-quarter revenue rose 24% to $59.9 billion; diluted EPS was $8.88.
- Investors are weighing whether ad growth can keep paying for the spending surge.
Meta forecast annual capital spending of $115 billion to $135 billion in 2026 on Wednesday, stepping up its push into artificial intelligence and putting a fresh spotlight on costs even after it beat Wall Street expectations for the holiday quarter. Shares were slightly lower in extended trading. Atmeta
The timing is the issue. Investors have been bracing for AI bills to swell across Big Tech, and Meta’s range is far above what the market had been gaming out ahead of the print.
Capital expenditure, or capex — money spent on long-lived assets such as data centers and servers — totaled $72.22 billion in 2025, and Meta is now guiding for another sharp leg up. Yahoo
The company also expects full-year 2026 total expenses of $162 billion to $169 billion, pointing to higher infrastructure costs, including third-party cloud spend and depreciation, as well as heavier employee compensation for technical talent. The spending race is already a sore point for investors across the sector, as Alphabet, Microsoft and Amazon keep piling money into AI infrastructure. Cnbc
Revenue rose 24% to $59.89 billion in the quarter ended Dec. 31, Meta said. Diluted earnings per share rose to $8.88.
Advertising revenue was $58.14 billion, leaving little doubt about what pays the bills, while operating margin fell to 41% from 48% a year earlier. Net income was $22.77 billion.
Usage held up. Family daily active people averaged 3.58 billion in December, up 7% from a year earlier, while ad impressions rose 18% in the quarter and the average price per ad increased 6%.
Reality Labs, the division that houses Meta’s metaverse work and some hardware, remained a drag: revenue slipped 12% to $955 million and the unit’s operating loss widened to $6.02 billion.
Meta forecast first-quarter revenue of $53.5 billion to $56.5 billion and said it still expects 2026 operating income to top 2025, despite the “meaningful step up” in infrastructure investment. The company also said Reality Labs operating losses should remain similar to 2025 levels.
“We had strong business performance in 2025,” CEO Mark Zuckerberg said. “I’m looking forward to advancing personal superintelligence for people around the world in 2026.” Superintelligence is industry shorthand for systems that could outperform humans across many tasks.
Reuters reported Meta is laying off about 10% of staff in Reality Labs, a unit with about 15,000 employees that has racked up more than $70 billion in losses since 2021, as it shifts resources from some metaverse products to wearables. Reuters also said Meta is building several gigawatt-scale U.S. data centers, including one in rural Louisiana that President Donald Trump said would cost $50 billion, and has partnered with Vistra, Oklo and TerraPower as it seeks more power. Reuters
The same Reuters report said Meta signed contracts last year with Alphabet, CoreWeave and Nebius for additional compute power, and described the spending spree as part of a broader AI rivalry after Meta’s Llama 4 model drew a poor reception. Meta is now betting on new AI models it launched internally this month, Reuters said.
Analysts have been clear about what they want to hear: less poetry, more numbers. TD Cowen’s John Blackledge said “key” will be management’s 2026 capex and expense guides, while BofA’s Justin Post said “an expense guide at around 30% 2026 growth could be positive” for the stock. Rothschild & Co Redburn’s James Cordwell framed the worry more bluntly: “The fear is that this is ‘Zuckerberg unleashed’.” Businessinsider
Some of the more bullish takes lean on Meta’s ad engine — the idea that its AI-driven tools turn the company into a “demand machine” for marketers, even if spending spikes again. That argument has helped keep lofty targets in play, with some calls clustered near $900. Barrons
But the upside case has a soft underbelly. Meta warned it is monitoring legal and regulatory headwinds in the EU and the U.S., including youth-related scrutiny, and said U.S. trials scheduled for this year “may ultimately result in a material loss.” A slower ad market would make the capex jump harder to swallow, and the payback from AI spending is still a bet.
Meta is discussing the results on a conference call scheduled for 1:30 p.m. PT. Investors will be listening for details on the AI roadmap, how quickly the company plans to hire, and whether the new spending range is a ceiling or a starting point.
