Meta Platforms, Inc. delivered impressive fourth-quarter earnings that exceeded analysts” expectations, resulting in a significant surge in its stock price. The company reported earnings of $8.88 per share on revenue of $59.9 billion, outperforming the consensus estimate for earnings of $8.19 per share and revenue of $58.5 billion. Following the announcement, Meta”s stock jumped more than 10% in after-hours trading, reflecting strong investor confidence.
During the quarter, Meta achieved a remarkable profit of $22.8 billion. The social media giant”s apps attracted 3.58 billion daily active users globally, a key metric indicating robust engagement across its platforms. CEO Mark Zuckerberg expressed optimism about 2025, describing it as a year of strong performance.
In a notable move, Meta announced plans to invest heavily in artificial intelligence, projecting capital expenditures between $115 billion and $135 billion for 2026. This figure nearly doubles the expected spending of $72.22 billion for 2025. The funds are earmarked for bolstering AI infrastructure, including data centers and advanced computing systems. In the fourth quarter alone, capital expenditures reached $22.14 billion.
Meta is joining the ranks of tech giants like Amazon, Google, and Microsoft in a competitive race to enhance AI capabilities. Recently, the company acquired a 49% stake in Scale AI for $14.3 billion, furthering its AI ambitions. Alexandr Wang, CEO of Scale AI, has taken on the role of Meta”s chief AI officer and will lead the newly established Meta Superintelligence Labs.
However, not all news is positive for Meta. The company”s Reality Labs division continues to struggle, with losses totaling $6 billion against revenues of $955 million. Analysts had anticipated a slightly lower operating loss of $5.9 billion for this unit. Meta”s investments in virtual and augmented reality have yet to yield profitability, prompting recent workforce reductions in its metaverse operations.
In a strategic shift, Meta is redirecting some resources toward developing AI-powered wearables, including smart glasses in collaboration with EssilorLuxottica. Zuckerberg envisions these smart glasses as the next major computing platform, potentially replacing smartphones in the future. Despite the promise of improved advertising efficiency through this technology, analysts caution that profitability could still be years away.
On the technology front, Meta has faced challenges with its Llama 4 Behemoth AI model, leading to potential changes in its development strategy. The company may abandon its open-weights model to switch to a proprietary framework for upcoming releases, which could restrict access for third-party developers. This comes amid increasing competition in the AI landscape, particularly from Google”s Gemini 3 model, which currently holds a leading position.
As Meta navigates these developments, it is also contending with legal challenges. A landmark trial accusing the company of causing mental health harm to young users has begun in Los Angeles, with Zuckerberg set to testify. Meanwhile, the FTC announced plans to appeal an antitrust case loss against Meta, which alleged anti-competitive practices related to its acquisitions of Instagram and WhatsApp.
In global regulatory news, Australia has implemented a social media ban for users under 16, with France considering similar legislation aimed at protecting young users from social media access. As Meta continues to adapt to these challenges and opportunities, its recent earnings report underscores the company”s resilience and strategic focus on AI and user engagement.
