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Meta Reports Revenue Growth and Plans to Nearly Double AI Spending

2026-01-29

The BareStory

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.

Left Perspective

  • Strong financial results are driving investor confidence
  • Leadership is pursuing an ambitious vision for proprietary AI
  • Strategic investments are securing necessary talent and infrastructure

Right Perspective

  • Capital expenditures are forecasted to escalate dramatically
  • The shift in focus has resulted in job cuts and highlighted past losses
  • Infrastructure limitations currently restrict growth potential

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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