Economy

Meta Reports Revenue Growth and Plans to Nearly Double AI Spending

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Jan 29, 2026

THE BARE STORY

Meta reported fourth-quarter earnings on Wednesday, revealing a 24% year-over-year increase in revenue driven by its core online advertising business. Alongside the financial results, the company announced a significant escalation in its artificial intelligence investment, projecting capital expenditures between $115 billion and $135 billion for the year. This forecast represents nearly double the amount spent in the previous year. Following the announcement, Meta shares rose approximately 10% in after-hours trading.

CEO Mark Zuckerberg characterized 2026 as a major year for AI, stating the company intends to build "personal super intelligence" and develop proprietary foundation models to avoid reliance on external technology. To support this infrastructure expansion, finance chief Susan Li noted that the company is currently "capacity constrained" and requires additional computing power. Additionally, Meta has committed to paying Corning up to $6 billion through 2030 for fiber-optic cable for its data centers.

The intensified focus on AI follows a strategic overhaul in 2025, which included a $14.3 billion investment in Scale AI to hire its founder, Alexandr Wang. Wang now leads the company's TBD unit, which is developing a new model code-named "Avocado," intended to succeed the Llama family of models.

This resource shift has impacted other areas of the company. Earlier this month, Meta laid off more than 1,000 employees from its Reality Labs virtual reality division. Since late 2020, Reality Labs has accumulated over $70 billion in operating losses. Despite the cuts and the pivot toward AI, Chief Technology Officer Andrew Bosworth stated that the company is not halting its virtual reality efforts.

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• Capital expenditures are forecasted to escalate dramatically The company plans to nearly double its spending compared to the previous year, projecting capital expenditures between $115 billion and $135 billion. This massive financial outlay represents a significant intensification of investment directed specifically toward artificial intelligence infrastructure.

• The shift in focus has resulted in job cuts and highlighted past losses As resources move toward AI, the Reality Labs virtual reality division saw the layoff of more than 1,000 employees earlier this month. This division has accumulated over $70 billion in operating losses since late 2020, although the Chief Technology Officer maintains that VR efforts are not halting.

• Infrastructure limitations currently restrict growth potential Despite the heavy investment plans, finance chief Susan Li acknowledged that the company is currently "capacity constrained." This admission suggests that the firm presently lacks the sufficient computing power required to fully support its expanding infrastructure needs immediately.

How it may affect me

As a U.S. reader: Investors with holdings in the tech sector may see portfolio gains, as Meta shares rose approximately 10 percent following reports of revenue growth and increased AI spending plans.

You may encounter new personal super intelligence tools in Meta applications by 2026, as the company develops proprietary models to avoid reliance on external technology providers.

Workers in the technology sector face potential instability, evidenced by over 1,000 layoffs in Meta's Reality Labs division as resources shift from virtual reality toward artificial intelligence.

U.S. manufacturing could see sustained demand through 2030 due to Meta's commitment to purchase up to $6 billion in fiber-optic cable from Corning for data center expansion.

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