Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Meta said its capital expenditures could nearly double to $135bn this year as part of its radical AI spending plans, while record revenue boosted its share price more than 10 per cent in after-hours trading.
The San Francisco-based company on Wednesday forecast capital expenditures between $115bn and $135bn in 2026, well above analysts’ estimates of about $110bn. Its 2025 capital expenditures totalled $72bn.
Revenues rose 24 per cent year on year in the fourth quarter to $59.9bn, beating consensus analysts’ forecasts of $58.4bn. Net income increased 9 per cent to $22.8bn, also ahead of expectations of $21bn.
The bumper earnings appeared to have quelled demands from Wall Street for Meta to justify the company’s massive spending on AI, sending its shares up more than 10 per cent.
On a call with investors on Wednesday, chief executive Mark Zuckerberg said growth was driven by “record-breaking holiday demand and AI-driven performance gains”. He added: “We are now seeing a major AI acceleration. I expect 2026 to be a year where this wave accelerates even further.”
Zuckerberg has intensified Meta’s push to develop “personal superintelligence” in an attempt to catch up with rivals such as OpenAI and Google in building top-performing models.
On Wednesday, he said the company would start shipping new AI models and products in the coming months that would “steadily push the frontier over the course of the year”.
Meta forecasts total expenses this year will be between $162bn and $169bn, largely driven by increased investment in AI infrastructure costs and talent as the company pours billions of dollars into its AI push.
Investors punished the tech group after its last earnings in October after news of Zuckerberg’s plans for greater data-centre spending. Its shares fell more than 11 per cent the following day, wiping almost $208bn from its market capitalisation.
Since then, Zuckerberg has doubled down on his plans to pour billions of dollars into AI infrastructure. Earlier this month he created an initiative called Meta Compute focused on building “hundreds of gigawatts” of AI infrastructure over the coming decades.
A single gigawatt of data centre capacity costs tens of billions of dollars to build and draws electricity equivalent to the output of a nuclear reactor.
Zuckerberg also this month named Goldman Sachs executive Dina Powell McCormick as the company’s new president and vice-chair, tasked with developing partnerships with governments and sovereign states in order to finance and deploy data centres around the world.
Meanwhile, the company is pulling back investment elsewhere, such as its lossmaking efforts to build an avatar-filled “metaverse”.
Earlier in January, the company cut about 1,500 jobs in the division and shuttered several initiatives and virtual-reality gaming studios. It said it wanted to focus on AI-powered wearables, which include its Meta Ray-Ban smart glasses and augmented-reality glasses prototypes.