Meta Reports Record Sales, Massive Spending Hike on AI Buildout
The company says its sales were about $60 billion in the fourth quarter for a year-over-year growth rate of 24%, ahead of analyst expectations
- Meta Platforms reported record fourth-quarter sales of $59.9 billion, a 24% year-over-year increase, with shares rising over 8% after hours.
- Meta plans to increase 2026 capital spending to $135 billion, nearly double last year’s investment, to fund AI expansion and global data centers.
- The company is shifting resources from metaverse efforts, laying off 10% of Reality Labs staff, to focus on AI development and AI glasses.
Meta META -0.63%decrease; red down pointing triangle Platforms reported record sales in the fourth quarter and a massive increase in projected 2026 spending, a sign the company has no plans to slow down an ambitious artificial-intelligence expansion.
The company said capital spending would reach as much as $135 billion in 2026, about 20% higher than Wall Street expectations and nearly double last year’s investment level. The company’s advertising and other units brought in $59.9 billion, a 24% year-over-year increase.
Shares rose around 8% in premarket trading Thursday.
Investors appeared to bless Meta’s plan to vastly increase spending, a contrast from last year when shareholders responded more warily and pushed for more detail on the company’s costly plans.
Chief Executive Mark Zuckerberg plans to build data centers around the globe, release new cutting-edge AI models and further infuse the core advertising business with AI this year.
“In 2025, we rebuilt the foundations of our AI program. Over the coming months, we’re gonna start shipping our new models and products,” he said on a call with investors and analysts. “I expect our first models will be good, but more importantly will show the rapid trajectory we’re on.”
Meta’s chief financial officer, Susan Li, said that by using AI, the company has been able to improve its systems that recommend content to users to keep them engaged and the one that targets users with personalized ads.
She added that WhatsApp will continue to roll out ads this year and that paid messaging on WhatsApp had passed a $2 billion annual run rate in the fourth quarter.
Meta, which had already been investing heavily in AI, made recent moves to ramp up those efforts. Earlier this month, the company said it had hired former Goldman Sachs partner Dina Powell McCormick as its new president to develop partnerships with governments to finance and deploy data centers across the globe.
To that end, Meta also announced a new “top-level” initiative called Meta Compute that is tasked with securing the enormous amounts of power the company needs to operate its AI models and social-media business.
“Meta is planning to build tens of gigawatts this decade, and hundreds of gigawatts or more over time,” Zuckerberg wrote in a post on Threads about the new initiative. “How we engineer, invest, and partner to build this infrastructure will become a strategic advantage.”
Meanwhile, investors, analysts and the tech industry at large are all watching to see what Meta’s new, supercharged AI unit is able to produce after Zuckerberg’s multibillion-dollar hiring spree over the summer.
It has been nearly eight months since Meta took a 49% stake in Scale AI and hired its CEO, Alexandr Wang, as its new chief AI officer. The company has yet to release a successor to Llama 4, the large language model released last spring that fell flat and led the company to restructure its AI efforts and set up its new Superintelligence Labs.
But there have been rumblings that a new model is on its way, and during an internal company Q&A session in December, Wang said Meta’s latest AI models, code-named Avocado and Mango, are expected to be released in the first half of this year.
Meta also recently acquired Singapore-based AI startup Manus for more than $2 billion, The Wall Street Journal reported, a month after winning an antitrust case brought by the Federal Trade Commission over its decade-old acquisitions of Instagram and WhatsApp.
On the call with investors and analysts, Zuckerberg declined to share more details on the progress of AI-model development.
“We’re doing a lot of models over time and a lot of different products and I want to make sure that the work can speak for itself,” he said. “I’m quite optimistic but don’t have anything else particularly concrete to share.”
Li said Meta has seen a 30%year-over-year increase in output per engineer, largely driven by AI coding tools, and that power users have seen an 80% output increase.
As AI takes center stage, Meta this month also made cuts to the teams working on its metaverse efforts.
The company laid off roughly 10% of staff, about 1,500 people, from its Reality Labs division that houses those teams and said it is shifting that spending to development of its AI glasses, where it has achieved more momentum.