Meta Shares Skyrocket as Company Reports Historic Sales Growth

Meta said its capital expenditures could nearly double to $135bn this year as part of its increasingly radical AI spending plans, while record revenue sent its shares up 8 per cent in pre-market trading on Thursday. In results released after the US market close on Wednesday, the social media giant forecast capital expenditures between $115bn and $135bn in 2026, well above analysts’ estimates of about $110bn. Its 2025 capital expenditures totalled $72bn. Revenues rose 24 per cent year on year in the fourth quarter to a record $59.9bn, beating forecasts of $58.4bn. Net income increased 9 per cent to $22.8bn, also ahead of expectations of $21bn.

I expect 2026 to be a year where this wave accelerates even further,” he said. Meta forecast revenue in the current quarter to be $53.5bn to $56.5bn, higher than expected. Zuckerberg has faced pressure from Wall Street to justify the company’s massive spending on AI. But the strong earnings appeared to have bought him time to build out his vision for the technology. Meta shares were up 8 per cent higher in pre-market trading on Thursday.

The Facebook founder said AI, including large language models, would continue to improve Meta’s existing social media and advertising business by delivering highly personalised content to users. Zuckerberg said current recommendations systems for users’ feeds and for advertising were “primitive compared to what will be possible soon”. Over the past year, Zuckerberg has intensified Meta’s push to develop “personal superintelligence” in an attempt to catch up with rivals such as OpenAI and Google in building top-performing models. He has poured billions of dollars into poaching top talent from peers and building out a fleet of data centres across the globe. He reassured investors that Meta would start launching new AI models and products in the coming months, with new opportunities to make money through subscriptions, advertising and commerce. Zuckerberg also touted the recent acquisition of AI agent platform Manus, noting that the start-up already has a “significant number” of business subscribers and that Meta could integrate the technology into its own products.

Meta Stock Price Surges Despite Reality Labs Losses Remain a Drag in Latest Meta Earnings

The strong headline numbers helped lift investor sentiment, even as some parts of the business continued to weigh on results. Meta’s Reality Labs division posted revenue of $955 million, slightly below expectations of $959 million. The unit also recorded an operating loss of $6 billion, compared with analysts’ expectations of a $5.9 billion loss.

Meta Accelerates AI Push With Scale AI Stake and New Leadership

Meta’s aggressive AI push mirrors moves by rivals Amazon, Google, and Microsoft, all of which are pouring billions into data centers to support growing AI demand. Meta has also made costly bets on talent and acquisitions, including spending $14.3 billion to buy a 49% stake in Scale AI and bring its CEO, Alexandr Wang, on board as Meta’s chief AI officer to lead its Superintelligence Labs.

The FT reported in December that the company was aiming for its new large language model, codenamed Avocado, to perform at the same level as Google’s Gemini 2.5 upon its release and catch up to Gemini 3 by the summer. Investors punished the tech group after its last earnings report in October after news of Zuckerberg’s plans for greater data centre spending. Its shares fell more than 11 per cent the following day, wiping almost $208bn from its market capitalisation. Since then, however, Zuckerberg has only increased his infrastructure ambitions.

Earlier this month he created an initiative called Meta Compute focused on building “hundreds of gigawatts” of AI data centre capacity over the coming decades. A single gigawatt of data centre capacity costs tens of billions of dollars to build and requires electricity equivalent to the output of a nuclear reactor. Zuckerberg also this month named Goldman Sachs executive Dina Powell McCormick as the company’s new president and vice-chair. A former senior official in Donald Trump’s first administration, she has been tasked with developing partnerships with governments to finance and deploy data centres around the world.

On Wednesday, Zuckerberg said the company was investing further in developing its own chips and that he expected “the cost per gigawatt to decrease significantly over time through optimising both our technology and supply chain”. He also said the company was investing in its own AI coding tools to improve the output of its engineers. Meta forecasts total expenses this year will be between $162bn and $169bn, largely driven by increased investment in AI infrastructure costs and talent.

Meanwhile, the company has been pulling back investment elsewhere, such as its lossmaking efforts to build an avatar-filled “Metaverse”. Earlier in January, the company cut about 1,500 jobs in the division and shuttered several initiatives and virtual reality gaming studios. Meta is now focused on AI-powered wearables, which include its Meta Ray-Ban smart glasses, sales of which more than tripled in 2025, Zuckerberg said on Wednesday.

Meta Faces AI Model Delays and Strategic Shifts

At the same time, the company has faced challenges with its latest AI efforts. Meta has experienced delays with its Llama 4 Behemoth model, and CNBC reported that the company is considering making its next major AI model proprietary, potentially moving away from its open-weights approach.

Meta Stock in Focus as Competition Intensifies in AI Race

Meta has also trimmed jobs in its metaverse division, with plans to redirect some of those savings toward wearables, including its AI-powered smart glasses. These moves have fueled perceptions that Meta is racing to keep pace in an increasingly competitive AI landscape, despite entering 2025 as a leading player. Google’s Gemini 3 model has since emerged as a key competitor, outpacing even OpenAI’s ChatGPT.

Regulatory and Political Pressures Add to Meta’s Long-Term Risks

Beyond technology and spending concerns, Meta continues to face regulatory and political pressures. Australia has enacted a ban on social media use for children under 16, France is considering similar measures, and in the US, the Federal Trade Commission recently said it will appeal its loss in an antitrust case accusing Meta of acquiring Instagram and WhatsApp to eliminate competition, as per the Yahoo Finance report.

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