Meta beats Q4 EPS, $59.9B revenue; guides $115-$135B AI spend
Meta beat Q4 EPS of $8.88 versus $8.23 and revenue of $59.89 billion against $58.59 billion estimates, driving an 8.06% extended-session rally to $722.60. The company recorded 3.58 billion daily active users in December and forecast 2026 AI capex of $115-135 billion ahead of its Avocado model launch.
1. Extended-Session Rally Fueled by Earnings Beat
Meta shares climbed by just over 8% in after-hours trading between January 28 and January 29 following the release of its fourth-quarter results. The key catalyst was a substantial upside on both revenue and earnings per share: Meta posted quarterly revenue of $59.89 billion versus consensus expectations of $58.6 billion, while earnings per share came in at $8.88 compared with the $8.23 analysts had forecast. Such outperformance helped reverse earlier market concerns and drove a sharp uptick in equity performance.
2. Record Daily Active People Underscore Platform Strength
In its December user metrics report, Meta announced 3.58 billion daily active people, representing approximately 43% of the global population of 8.23 billion. This level of engagement is notable given intensifying competition from established rivals like X and emerging entrants such as UpScrolled. The durability of Meta’s user base reassures advertisers that the company’s vast network continues to offer unrivaled reach and targeting potential, supporting ongoing revenue growth in its core Family of Apps segment.
3. Ambitious AI Capital Expenditure Plan for 2026
Management outlined plans to invest between $115 billion and $135 billion in capital expenditures during 2026, nearly doubling the prior year’s spend. A significant portion of the planned outlay will fund data center expansions, advanced computing infrastructure and hiring of AI researchers. CFO Susan Li reiterated that Meta remains capacity-constrained and needs additional computing power to sustain both advanced ad-targeting capabilities and next-generation AI foundation models.
4. Avocado AI Model and Personal Superintelligence Vision
Building on the previous Llama family of models, Meta is set to unveil a new AI foundation model codenamed Avocado in the first half of 2026. CEO Mark Zuckerberg emphasized that Meta is focused on ‘personal superintelligence’—AI agents that can tailor content feeds, optimize ad placements and enable ‘agentic shopping’ experiences. Success with Avocado could validate Meta’s strategy of heavy internal AI investment and help the company diversify revenue streams beyond advertising while improving user engagement across its platforms.