Meta's AI Leap: Billions Invested, Stock Soars

Meta Platforms reported a strong fourth-quarter performance, with earnings per share of $8.88 on revenue of $59.9 billion, exceeding analyst predictions. This financial success fueled a more than 9% surge in Meta's stock during extended trading on Wednesday.

Central to the company's future strategy is a significant increase in planned spending. Meta unveiled a capital expenditure outlook for 2026, projecting investments ranging from $115 billion to $135 billion. This substantial financial commitment underscores a dedicated focus on artificial intelligence and the necessary data center infrastructure.

The company's aggressive investment in AI aligns with that of major tech rivals, including Amazon, Google, and Microsoft, all intensifying their own data center expansions to meet escalating AI demands. Meta has also pursued strategic talent acquisitions, like bringing Scale AI's CEO aboard.

However, Meta faces hurdles in its AI development, including reported delays with its Llama 4 Behemoth model and considerations about shifting its open-weights approach. The company is also reallocating resources from its metaverse division towards wearables, such as AI-powered smart glasses.

Beyond technological advancements and financial outlays, Meta continues to navigate a complex regulatory landscape. International measures, such as Australia's ban on social media for minors under 16 and potential similar actions in France, alongside ongoing antitrust challenges in the US, present ongoing concerns for the company.