Overview
- Meta topped Q4 estimates and issued sales guidance ahead of forecasts, with advertising revenue rising about 24% year over year.
- The company set 2026 capital expenditure at $115 billion to $135 billion to expand AI infrastructure, up from just over $72 billion in 2025.
- Management highlighted concrete AI payoffs, including doubling GPUs for its ads ranking model, video-generation tools at a $10 billion annual run rate, and stronger engagement such as a 30% jump in Instagram Reels viewing time.
- Following the report, Freedom Capital Markets raised its price target to $825 and the company said 2026 absolute operating profit is expected to exceed 2025.
- Skeptics caution the shares are priced for perfection, with Needham’s Laura Martin flagging potential 10%–15% downside, and market reaction to hyperscaler capex has diverged as Microsoft sold off on higher spending while Meta initially rallied.