Meta’s AI Ambition Fueled by Record Profits

Meta US30303M1027

Investors are rallying behind Meta Platforms' aggressive new strategy, signaling strong approval for the company's massive planned expenditure on artificial intelligence infrastructure. This enthusiasm stems from a robust financial performance that provides the capital for this ambitious technological pivot.

The foundation for Meta's future plans was laid by exceptionally strong financial results for the fourth quarter of 2025. The company reported a year-over-year revenue increase of approximately 24%, reaching $59.89 billion and significantly surpassing market expectations. Earnings per share also outperformed, coming in at $8.88 against analyst forecasts of $8.16.

Once again, the advertising business served as the primary engine, generating over $58 billion in revenue alone. Company leadership attributed this growth to a combination of an increased volume of ads delivered and higher average prices per ad placement, pointing to sustained healthy demand in its core market.

Unprecedented Capital Expenditure for AI

The forward-looking guidance, however, captured the market's primary attention. For the 2026 fiscal year, Meta announced capital expenditure (CapEx) plans ranging from $115 billion to $135 billion. This represents a substantial jump from the roughly $72 billion spent in the prior year. CEO Mark Zuckerberg framed this investment as essential for building the computational capacity required for advanced artificial intelligence.

To secure the supply chain for this expansion, Meta also entered into a strategic partnership with Corning valued at up to $6 billion. This agreement is designed to ensure the supply of fiber optic cables needed for the upcoming AI data centers.

Market Reaction and Revised Targets

The financial community responded swiftly to these developments. Several institutions raised their price targets for Meta shares on Thursday:
* Jefferies increased its target to $1,000, citing Meta's ability to exceed growth expectations while scaling its AI initiatives.
* Goldman Sachs raised its target price to $835.
* JPMorgan reaffirmed its "Overweight" rating and issued a new target of $825.

The market immediately rewarded the combination of operational strength and long-term vision. Meta's stock climbed to a new 52-week high of $719.00 on Thursday.

Sustained Momentum Expected

Further bolstering confidence, management provided revenue guidance for the first quarter of 2026 between $53.5 billion and $56.5 billion, suggesting the current growth trajectory is likely to continue into the new year. For now, investors appear willing to support the capital-intensive journey into the AI era, reassured by the reliable cash generation of Meta's established advertising business.

@ boerse-global.de | US30303M1027 META’S