Meta crushed the quarter — then sounded a $135 billion alarm

This year, Mark Zuckerberg is planning to write the kind of corporate check that can change a company’s personality. On Wednesday, Meta $META delivered a monster quarter — about $59.9 billion in revenue and $8.88 in EPS — and then budgeted 2026 like it plans to buy the future in bulk: $115 billion to $135 billion in capex, plus expenses heading toward $169 billion, as Meta keeps working to turn “superintelligence” into a procurement problem.

Shares initially jumped about 10% in after-hours trading as investors digested the heady combination of stronger-than-expected results and an exceedingly bullish near-term revenue outlook — even with a spending plan that reads like an infrastructure bond prospectus. Wall Street may happily applaud a beat, but it will pay for a story — and Meta handed it one: strong advertising now, enormous AI buildout next, and enough confidence to promise that operating income in 2026 will land above 2025 even after the spending step-up.

Still, Meta’s guidance is the kind that can trigger investor flinching — and it did, last time. In late October, Meta warned that capex growth in 2026 would be “notably larger” than in 2025, but the company didn’t actually put numbers on it. The stock fell about 8% in after-hours trading. This time, Meta sketched out the bill and paired it with a Q1 revenue outlook of $53.5 billion to $56.5 billion that topped many expectations.

Zuckerberg’s contribution to the storyline was a vision statement, a recruiting pitch, and an explanation for why Meta is suddenly talking like a utility company that also happens to sell ads. “We had strong business performance in 2025,” he said in the release, adding that he’s “looking forward to advancing personal superintelligence… in 2026.” 

He may want to talk about “personal superintelligence,” but the Street still cares about the part of the business that's steeped in the present reality; Meta remains a very large advertising business that keeps finding new ways to wring more money out of the same human habit — staring at a screen and calling it fun. The ad business is a compounding engine with an unusually large moat; ad impressions rose 18% year over year in Q4, and the average price per ad increased 6%. Family daily active people — Meta lingo for the number of frequent users of its many apps — averaged 3.58 billion in December. Those are the kinds of numbers that let a company talk about “massive investment” without immediately getting sent to the principal’s office.

Because crucially, AI ambition doesn’t float on vibes. It sits on concrete. And it requires lots and lots of money. “AI” is increasingly shorthand for “capex,” and capex requires a cash fountain that doesn’t blink when everyone else does; Meta’s spending plan is nearly double the already massive $72.2 billion it reported for 2025, and its total expenses are up from $117.7 billion in 2025. 

Meta’s outlook is explicit about where the money will go. It expects 2026 expense growth to be driven mostly by infrastructure costs — third-party cloud spend, higher depreciation, and higher infrastructure operating expenses — with compensation next, as it hires and pays technical talent to staff its priority areas.

But the quarterly earnings also show the cost of the pivot. Operating margin fell to 41% from 48% a year earlier, as costs and expenses rose 40% year over year in the quarter. Research and development alone was $17.1 billion in Q4, up from $12.2 billion a year earlier.

Meta wants to overwhelm any anxiety with a spend now, own capacity later argument. Its buildout story has been getting more literal by the week. Zuckerberg has been framing the bottleneck as compute and power — measured in gigawatts — and the company has rolled out “Meta Compute” as an effort to secure that capacity and the partnerships that come with it. The same dynamic shows up in Meta leaning on third-party cloud providers to bridge constraints while it scales its own footprint, including a major data center project in Louisiana.

If your mental model of Meta is still “social app company,” the company is asking you to update your software. This is also an industrial buildout.

But funding that buildout is a different story; Meta’s balance sheet is preparing for a more capital-intensive life. Long-term debt ended 2025 at $58.74 billion, up sharply from the year prior, and Meta issued roughly $29.9 billion of long-term debt net in Q4 alone. That fits with the broader financing drumbeat around Big Tech tapping debt markets to fund AI infrastructure, including Meta’s move last fall toward a bond offering “up to $30 billion.”

There are, of course, the usual reminders that Meta is still Meta: regulatory and legal headwinds, especially around child-safety issues, and more changes coming to its Less Personalized Ads offering in Europe as it keeps trying to thread the needle between compliance and monetization. But the legal calendar is the kind of overhang that doesn’t wait for an AI story.

Meta is asking investors to grade it on a new curve. The market’s initial reaction suggests that, for now, investors are willing to entertain that idea — as long as the ad engine keeps humming and the near-term guidance stays buoyant. So far, so good.