Meta Stock Jumps After Earnings Beat and AI Spending Outlook
Meta Platforms (META) reported earnings per share of $8.88 on revenue of $59.9 billion, topping analysts’ expectations of $8.16 in EPS and $58.4 billion in revenue, as per Bloomberg consensus estimates.
Meta Earnings Call: Stock Rallies Despite Higher Capital Expenditure Guidance
Alongside the earnings beat, Meta unveiled its capital expenditure outlook for 2026, projecting spending between $115 billion and $135 billion, as per a Yahoo Finance report. That marks a significant increase from the $72.22 billion the company spent in 2025, underscoring how heavily Meta is investing in artificial intelligence and data center infrastructure.
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.
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.
FAQs
What is Meta’s 2026 spending plan?
Meta expects capital expenditures between $115 billion and $135 billion in 2026.
How did investors react to Meta earnings?
Meta shares surged more than 9% in extended trading.
