On January 28, Meta reported fourth-quarter revenue of $59.89 billion, topping consensus by over $1 billion, and delivered earnings per share that outpaced Street estimates by more than $0.20. For the full year, Meta crossed the $200 billion revenue threshold for the first time, representing 22% year-over-year growth. The strong beat prompted a 7% rally in the stock post-earnings and underlines the durability of its core advertising business even as the company ramps up AI spending. Management guided to accelerating revenue growth in Q1 2026, driven by seasonal ad strength and new demand for AI-powered formats.

Meta plans approximately $125 billion in capital expenditures for 2026—more than double its 2021 capex—focused on AI training infrastructure, datacenter expansions and next-generation consumer hardware. Key initiatives include the Meta Superintelligence Labs, where the company is training custom large language models, and the roll-out of Ray-Ban smart glasses in partnership with EssilorLuxottica. Despite a temporary drag on free cash flow, Meta’s operating cash flow exceeded $116 billion in 2025 and its gross margins held near 82%, underscoring its ability to self-fund these investments without jeopardizing its $82 billion cash balance and $23 billion net cash position.

Following the earnings beat, Meta still trades at a significant discount to other large-cap tech peers, with analysts pointing to a risk/reward skewed in favor of long-term holders. Morgan Stanley recently lowered its price target, reflecting caution around elevated capex, but the firm maintains an equal-weight rating based on 24% average annualized revenue growth forecasts through 2028. With return on invested capital expected to benefit from proprietary AI tools that improve ad targeting efficiency, many strategists view current levels as an attractive entry point for investors seeking exposure to both digital advertising and the next wave of AI monetization.