Meta Says Revenue to Beat Estimates, Supporting AI Spending

Meta Platforms topped projections for quarterly revenue and gave a strong forecast for the current period, boosted by a robust online advertising business that is making it possible for the company to invest in artificial intelligence at record levels this year. Meta said first-quarter sales will be $53.5 billion to $56.5 billion, beating the $51.3 billion average analyst estimate. The owner of Facebook, Instagram and WhatsApp said full-year capital expenditures will be $115 billion to $135 billion, exceeding the $110.6 billion average analyst estimate, according to data compiled by Bloomberg. Bloomberg News Senior Technology Reporter Kurt Wagner joins Bloomberg Businessweek Daily to discuss. He speaks with Carol Massar and Tim Stenovec.

Meta Platforms Inc.’s better-than-expected sales outlook helped ease Wall Street concerns about plans for unprecedented spending on artificial intelligence this year.

The social networking giant topped projections for holiday quarter revenue and gave a strong forecast for the current period during its earnings report Wednesday. Improvements in its online advertising business are making it possible for Meta to spend hundreds of billions of dollars over the next few years on AI infrastructure. Meta’s shares jumped more than 11% in extended trading. Meta projected record spending for 2026, driven by Chief Executive Officer Mark Zuckerberg’s aggressive campaign to amass the infrastructure, computing power and talent that he deems necessary to win a competitive AI race. Zuckerberg has said his strategy centers on “front-loading” computing capacity in preparation for reaching the company’s goal of superintelligence, a theoretical milestone at which point AI can meet or outperform humans at many tasks.

To get there, Meta is spending aggressively. The company estimated that full-year capital expenditures will be between $115 billion and $135 billion, exceeding the $110.6 billion average analyst estimate, according to data compiled by Bloomberg. If Meta hits the top-end of that range, it will mean a jump of roughly 87% from 2025, a record year in which cap-ex topped $72 billion. Speaking on a call with investors, Zuckerberg said to look forward to “a major AI acceleration” that’s been brewing within the tech industry for over a year. After an overhaul of Meta’s AI program in 2025, Zuckerberg said Meta will soon release new models and products, though the Facebook founder’s near-term expectations were uncharacteristically subdued: “I expect our first models will be good, but more importantly, we’ll show the rapid trajectory that we’re on,” he said. He reiterated during the call that Meta’s upcoming models may not wow at launch, but will improve meaningfully over time.

Read More: Inside Meta’s Tilt From Open Source Toward Make-Money AI Model

To finance these expensive projects, Meta is leaning heavily on its advertising business. The owner of Facebook, Instagram and WhatsApp said first-quarter sales will be $53.5 billion to $56.5 billion, beating the $51.3 billion average analyst estimate. Chief Financial Officer Susan Li spent much of her time on the call talking about ways that Meta’s AI investments are helping the company better target ads and give users more personalized content recommendations, which keeps them scrolling.

Investors have historically been anxious about whether Meta’s businesses will benefit meaningfully from its hefty AI investments. “Meta’s lack of model capabilities vs. frontier large language models leaves uncertainty around monetization of its AI investments compared with hyperscale cloud peers,” Bloomberg Intelligence analyst Mandeep Singh said in a note last week. But those concerns were tamed on Wednesday. The social media giant reported fourth-quarter sales of $59.9 billion, beating the $58.4 billion that Wall Street expected on average. It was a sign that while spending is up, the core business supporting those investments is also growing faster than expected. Investors were less forgiving of Microsoft Corp., which saw shares tumble after unveiling a similarly ambitious 2026 spending outlook on Wednesday.

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