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Meta Platforms Delivers Record Q4 Results on January 28, 2026
Meta Platforms, Inc. (META) released its fourth quarter and full-year 2025 financial results today, January 28, 2026, showcasing robust growth driven by aggressive AI investments despite mounting losses in its Reality Labs division. Analysts had forecasted Q4 revenue at $58.4 billion, up 21% year-over-year, with earnings per share (EPS) at $8.21, a modest 2% increase amid soaring expenses. The official press release from Menlo Park confirmed strong business performance across Facebook, Instagram, WhatsApp, and emerging AI initiatives, as stated by CEO Mark Zuckerberg.
AI Investments Propel Revenue, Capex Explodes
Meta's capital expenditures (capex) ballooned to an estimated $70 billion in 2025, doubling from $37 billion in 2024, with projections exceeding $100 billion in 2026 to fuel AI data centers and compute power. This surge supports Meta Compute, a new division aimed at accelerating data-center buildouts through partnerships, including a joint venture with Blue Owl for a Louisiana facility where Meta retains 20% ownership and a four-year lease. Zuckerberg emphasized the need for "massive compute" to integrate AI features into Facebook and Instagram, enhance ad profitability (still ~98% of revenue), and empower researchers, acknowledging the risk of wasting "a couple hundred billion" but prioritizing investment over underfunding.
Dina Powell McCormick, former banker and new president of Meta Compute, will spearhead financing efforts, leveraging her international ties to secure capital from sovereign-wealth funds. This strategic pivot reflects Meta's transformation from an ad-dominated giant to an AI powerhouse, reshaping its balance sheet as expenses climb.
Reality Labs Faces Cuts After $73B Losses
Contrasting the core business strength, Reality Labsencompassing Quest VR and metaverse ambitionshas accumulated approximately $73 billion in losses since 2021. In a cost-cutting move, Meta laid off over 1,000 employees from this division recently, contributing to a 12% stock rally in the past six days ahead of earnings. These reductions signal a potential recalibration of VR and AR priorities amid persistent unprofitability, even as Meta pushes forward with hardware like Quest headsets.
Market Reaction and Analyst Outlook
META stock outperformed ahead of the report, buoyed by optimism around Q4 beats and structural changes. Bernstein SocGen Group maintained an Outperform rating with an $870 price target, citing Meta's positioning in AI and tech titans. Investors now scrutinize 2026 capex guidance, creative financing like the Blue Owl JV, and how AI enhancements will boost user engagement and ad yields across platforms.
The earnings underscore Meta's high-stakes bet on artificial intelligence. With ad revenue as the bedrock, AI-driven tools promise personalized feeds, better targeting, and new monetization streams on Instagram Reels and WhatsApp commerce. However, the Reality Labs drag highlights tensions between visionary metaverse goals and fiscal discipline. Zuckerberg's comments in the release affirm 2025's strength, setting the stage for 2026's AI dominance.
Technical details reveal Meta's AI stack: custom silicon like MTIA v2 for training efficiency, deployed in data centers housing Llama models. These enable on-device AI for billions of users, reducing cloud dependency. Capex breakdown likely prioritizes GPUs from Nvidia partners, with Meta's 600,000+ H100 equivalents online by year-end 2025. The Louisiana JV mitigates balance-sheet strain, offloading assets while securing capacity.
Broader impact: Meta's moves pressure rivals like Alphabet and Microsoft in the AI arms race, potentially reshaping social media economics. For users, expect smarter feeds and AR filters sooner. Regulators watch capex-fueled dominance, especially post-2023 news bans in Canada, where Ottawa signals openness to deals.
This report, fresh on January 28, 2026, positions Meta as AI's frontrunner, balancing innovation risks with profitability.