Meta Platforms is planning a massive artificial intelligence investment cycle. This ambitious plan raises significant risks and uncertainties regarding long-term returns. Meta shares are currently trading at about $675.
In its latest earnings report, Meta’s fourth-quarter revenues surged 24% year over year to $59.9 billion. The company also reported that its daily active users reached 3.58 billion in December, representing a 7% increase from the previous year.
Key financial metrics:
- Management guided for first-quarter revenue of $53.5 billion to $56.5 billion.
- Meta spent $72.2 billion on capital expenditures in 2025.
- Capital expenditures are expected to increase to between $115 billion and $135 billion in 2026.
Mark Zuckerberg stated, “We’re starting to see the promise of AI that understands our personal context — including our history, our interests, our content, and our relationships.” He added, “Our vision is building personal superintelligence.” However, the long-term returns on this AI infrastructure spending remain uncertain.
The options market implies a substantial 7.5% move by the end of the week. Meta’s stock moved more than 10% following earnings in three of the last four quarters. Yet, some analysts caution that Meta shares look “iffy” into earnings, suggesting that buying the stock now is a bit of a coin toss.
Meta’s market capitalization exceeds $1.7 trillion, with a gross margin of 82%. Analysts estimate that its earnings per share will range between $58 and $66 in five years, while the stock price estimate for Meta in five years is about $1,250.
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