Meta Platforms Inc. reported strong fourth-quarter earnings that exceeded analysts’ expectations, both in terms of revenue and earnings per share. The company disclosed earnings per share of $8.88 and revenue of $59.9 billion, surpassing estimates of $8.16 and $58.4 billion, respectively. Following the announcement, Meta’s stock price experienced an upward trend.
Looking ahead, Meta provided guidance for its capital expenditures in 2026, projecting an increase between $115 billion and $135 billion, a significant rise from the $72.22 billion spent in 2025. This commitment reflects Meta’s ongoing investment in innovative technologies and infrastructure, particularly in artificial intelligence.
The company’s Reality Labs division, responsible for developing virtual and augmented reality products, generated $955 million, slightly under the anticipated $959 million. However, this segment continued to grapple with substantial losses, posting a $6 billion deficit, which was higher than the expected operating loss of $5.9 billion.
Meta is not alone in its massive investment in AI; competitors such as Amazon, Google, and Microsoft are also heavily investing in their AI data centers. Recently, Meta’s strategy included a significant acquisition of a 49% stake in Scale AI for $14.3 billion, along with hiring its CEO, Alexandr Wang, to lead Meta’s AI initiatives.
Despite these investments, the company faces challenges, notably with delays in launching its AI models, including the anticipated Llama 4 Behemoth. Reports suggest that Meta may shift towards making its next AI models proprietary, stepping back from its previous open-weights policy that benefitted third-party developers.
In addition to its AI endeavors, Meta has implemented job cuts within its metaverse division to redirect resources toward its wearables projects, including AI-powered smart glasses. This restructuring positions Meta amid intense competition in the AI sector, where it finds itself trying to reclaim its early leadership against rivals like Google and its advanced Gemini 3 model.
Meta is also encountering regulatory hurdles, as discussions about age restrictions for social media platforms intensify. Australia has already established a ban on social media for children under 16, with France contemplating similar legislative measures.
On the regulatory front in the U.S., the Federal Trade Commission has announced its intention to appeal the outcome of its antitrust case against Meta, which accused the company of acquiring Instagram and WhatsApp to eliminate competition in the social networking market.
Meta’s adaptability and strategic investments suggest a determination to navigate through these challenges and maintain its relevance in the evolving tech landscape. As the company balances innovation with regulatory pressures, it remains poised for continued evolution in the dynamic sectors of AI and social media.