Meta Platforms delivered stronger-than-expected fourth quarter 2025 results Wednesday, sending shares surging as much as 10% in after-hours trading. The social media giant also announced ambitious artificial intelligence infrastructure plans that will see capital expenditures reach between $115 billion and $135 billion in 2026.
The Facebook parent company reported earnings per share of $8.88 on revenue of $59.9 billion for the quarter ended December 31, 2025. Both figures exceeded analyst expectations of $8.16 EPS and $58.4 billion in revenue based on Bloomberg consensus estimates.
Record AI Investment Signals Major Buildout
Meta’s projected 2026 capital expenditure represents a dramatic increase from the $72.22 billion the company spent in 2025. The massive investment reflects an industrywide race among technology giants to build out artificial intelligence infrastructure and capture dominance in generative AI markets.
“We had strong business performance in 2025,” said Mark Zuckerberg, Meta founder and CEO. “I’m looking forward to advancing personal superintelligence for people around the world in 2026.”
The spending announcement positions Meta alongside rivals Amazon, Google and Microsoft, all of whom are pouring tens of billions into AI data centers and computing infrastructure. The competition has intensified as companies race to develop more powerful AI models and secure the hardware needed to train them.
Reality Labs Losses Continue
Meta’s Reality Labs division, which develops virtual and augmented reality technologies, generated $955 million in revenue during the fourth quarter, slightly below the anticipated $959 million. The division recorded operating losses of $6 billion, marginally exceeding analyst expectations of $5.9 billion in losses.
Despite ongoing losses, Meta recently announced plans to reallocate resources from its metaverse initiatives toward AI-powered wearables, including its smart glasses products developed in partnership with Ray-Ban.
Strategic AI Moves and Competitive Pressures
Meta has made several high-profile moves to strengthen its AI capabilities. The company recently acquired a 49% stake in Scale AI for $14.3 billion, hiring CEO Alexandr Wang to serve as Meta’s chief AI officer and lead its Superintelligence Labs division.
However, Meta faces mounting competitive pressure. Google’s Gemini 3 model has emerged as a leading performer in the AI space, surpassing expectations and challenging Meta’s position. The company has also experienced delays with its Llama 4 Behemoth model, contributing to perceptions that Meta may be struggling to maintain its early AI leadership.
According to reports, Meta is considering abandoning its open-weights strategy for future AI models, potentially making its next major release proprietary rather than allowing third-party developers to access and improve the technology.
Additional Business Challenges
Beyond AI competition, Meta confronts regulatory and social pressures on multiple fronts. The company faces increasing calls for social media restrictions on users under age 16, with Australia already implementing such bans and France considering similar measures.
In the United States, the Federal Trade Commission announced last week it would appeal its antitrust case loss against Meta. The FTC had alleged the company acquired Instagram and WhatsApp specifically to eliminate competitive threats to its social networking dominance.
Looking Forward
Meta’s massive AI spending commitment signals the company’s determination to remain competitive in artificial intelligence despite challenges. The announced capital expenditure guidance for 2026 represents one of the largest infrastructure investments in the technology sector’s history.
The company expects first quarter 2026 revenue between $53.5 billion and $56.5 billion, with full-year expenses ranging from $162 billion to $169 billion. Infrastructure costs, including third-party cloud services and depreciation, will drive the majority of expense growth.
As Meta pivots resources toward AI development, the success of these investments will likely determine whether the company can maintain its position among technology leaders in an increasingly competitive artificial intelligence landscape.
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