Meta Platforms stock surged 9% on Thursday following a strong fourth-quarter earnings report that exceeded Wall Street expectations and showcased robust advertising revenue growth. The social media giant reported revenue of $59.9 billion against forecasts of $58.4 billion, while earnings per share reached $8.88 compared to the consensus estimate of $8.16, according to the company’s Wednesday announcement.
The Meta stock rally erased losses from the previous week and pushed the company’s year-to-date gains to 10%. Despite unveiling ambitious artificial intelligence spending plans totaling $115 billion to $135 billion for the coming year, investors responded positively to the quarterly results.
Strong Advertising Business Fuels Meta Stock Performance
The key driver behind investor confidence appears to be Meta’s advertising business performance, which significantly outpaced expectations during the fourth quarter. This strength in core advertising operations provided reassurance that the company can fund its aggressive AI expansion without compromising financial stability.
CFO Susan Li emphasized during the earnings call that Meta would finance its AI initiatives using cash generated from operations rather than taking on additional debt. This approach demonstrated the company’s financial strength and ability to self-fund its technological ambitions through existing revenue streams.
AI Spending Plans Draw Different Reaction
The planned capital expenditure represents a substantial increase from the $72.22 billion Meta spent on AI infrastructure in 2025. However, unlike previous quarters when investors reacted negatively to elevated spending forecasts, the market’s response this time proved markedly different.
Wall Street analysts attribute the positive reception to the company’s demonstrated ability to generate sufficient cash flow from its advertising platform. The contrast highlights how strong operational performance can offset concerns about aggressive investment strategies in competitive technology sectors.
Analysts Maintain Bullish Outlook on Meta Stock
Industry analysts remain optimistic about Meta’s growth trajectory heading into 2026. Dan Ives of Wedbush Securities noted that ongoing investments across the business are already driving tangible benefits for the core advertising segment.
Additionally, analysts highlighted that the integration of AI capabilities across Meta’s advertising technology stack and content recommendation engines is producing measurable results. These improvements demonstrate that the company’s substantial capital investments are translating into competitive advantages and revenue growth.
Market Implications and AI Race Dynamics
The earnings report provided important insights into the competitive dynamics of the artificial intelligence race among major technology companies. Meta’s results showed that the company is successfully balancing aggressive AI development with profitable core business operations.
Meanwhile, the positive market reaction contrasts with growing anxiety that emerged late last year regarding soaring capital expenditures among hyperscale technology companies. Investors had expressed concerns about whether massive AI investments would generate adequate returns to justify the spending levels.
In contrast to those worries, Meta’s quarterly performance demonstrated a viable path forward. The company’s ability to fund AI expansion through advertising revenue rather than debt financing addresses key investor concerns about financial sustainability.
Revenue Growth and Strategic Positioning
The social media company’s revenue performance exceeded analyst projections across multiple metrics. Furthermore, the results indicated that Meta’s strategic focus on integrating AI throughout its platform ecosystem is strengthening rather than diluting its core business fundamentals.
Analysts noted that the infusion of AI capabilities into Meta’s advertising infrastructure is enhancing targeting precision and campaign effectiveness. These improvements are attracting additional advertiser spending and expanding the platform’s competitive moat against rivals.
Meta has not specified the exact timeline for deploying its planned AI capital expenditures throughout 2026, though the company indicated investments would continue throughout the year. Market observers will monitor subsequent quarterly reports to assess whether advertising revenue growth can sustain the elevated spending trajectory and deliver the returns investors now anticipate.
