Meta reported fourth-quarter revenue of $59.9 billion, led by a 24% increase in advertising sales. Ad impressions rose 18% year-over-year and the average price per ad increased by 6%, reflecting robust demand for AI-powered targeting. The company also disclosed a 10% improvement in advertising efficacy attributable to its AI ad-buying engine, signaling that every dollar invested in AI training is translating into higher monetization within the same quarter. These results underscore Meta’s ability to convert AI enhancements into near-term cash flow and support continued top-line momentum.

On January 29, investors rewarded Meta with a 10% share price jump after management outlined plans to nearly double its AI budget to $135 billion in 2026. Unlike peers constrained by data-center power limitations, Meta’s AI spend flows directly into its existing infrastructure, improving ad targeting and engagement in real time. Analysts estimate that if the company’s valuation reverts toward sector averages, there could be up to 57% upside, driven by sustained market-share gains in the digital advertising segment and a backlog of AI project wins among major brand advertisers.

Meta’s balance sheet shows $44.5 billion in cash against $51 billion of debt, a shift from $77.8 billion of cash versus $49 billion of debt a year earlier. The company’s accelerated capital-expenditure guidance of $115–$135 billion for fiscal 2026 indicates continued heavy investment in both AI and data-center build-out. However, increased financial leverage comes alongside the onset of a high-profile trial in New Mexico, where the state accuses Meta of exposing minors to exploitation on its platform. The outcome could impose regulatory or remediation costs, representing a new layer of operational risk investors must monitor.