Meta Stock Soars on Strong Q4 Earnings and AI Investment Plans

Feb 1, 2026, 2:41 AM

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Meta Platforms Inc (META) experienced a substantial increase in its stock price early Thursday, following the release of its fourth quarter earnings that exceeded analysts' expectations on both revenue and earnings per share. The company's stock rose as much as 10% shortly after the announcement on Wednesday, reflecting investor confidence in its financial performance and future plans.

In its Q4 report, Meta posted earnings per share (EPS) of $8.88 and total revenue of $59.9 billion. These figures surpassed analyst predictions, which estimated an EPS of $8.16 and revenue of $58.4 billion according to Bloomberg's consensus estimates. While the company's Reality Labs division generated $955 million, it also reported a significant loss of $6 billion for the segment, which analysts had anticipated would be slightly lower at $5.9 billion.

Looking ahead, Meta outlined an ambitious capital expenditure plan for 2026, expecting to spend between $115 billion and $135 billion, a notable increase from the $72.22 billion it invested in 2025. This strategic decision highlights Meta's commitment to enhancing its artificial intelligence capabilities amid a competitive landscape dominated by tech giants like Amazon, Google, and Microsoft, all of which are heavily investing in AI infrastructure.

Meta's significant investments in AI are not limited to financial outlays. The company has made high-profile hires and acquisitions, including a $14.3 billion investment to acquire a 49% stake in Scale AI and appoint its CEO, Alexandr Wang, as Meta's chief AI officer. This move aims to bolster Meta's position in the rapidly evolving AI sector, particularly as it navigates challenges with its latest AI models, including delays with its Llama 4 Behemoth project.

Despite these efforts, Meta faces increasing scrutiny and competition within the AI market. Google, for instance, has made strides with its Gemini 3 model, positioning itself at the forefront ahead of Meta and even OpenAI, the developer of ChatGPT. This competitive pressure has prompted Meta to consider shifting its AI models to a proprietary framework, moving away from their current open-weights strategy that allows broader access for developers.

In addition to AI challenges, Meta is grappling with regulatory pressures. The Federal Trade Commission (FTC) is appealing a recent antitrust ruling, which questioned the company's acquisitions of Instagram and WhatsApp, considering them threats to its dominance in the social networking arena. Furthermore, there are growing calls for stricter regulations on social media usage among minors, with countries like Australia already enacting bans for children under 16, and France contemplating similar measures.

As Meta continues to navigate these complex dynamics, its stock performance and strategic investments in AI will be closely watched by investors and analysts alike. With its ambitious spending plans and ongoing innovations, Meta aims to solidify its position as a leader in the tech industry, while addressing the challenges that accompany such rapid growth and transformation in the market.

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