Strong Fourth-Quarter Performance

Meta Platforms, Inc. reported its fourth-quarter earnings on Wednesday, showing a 24% increase in sales compared to the same period last year.

The company's advertising business alone generated $58.1 billion during this time, which constituted nearly 97% of its total revenue for the quarter. This performance led to a significant boost in Meta's stock, which surged by as much as 10% in after-hours trading.

Positive Sales Forecast for 2026

Looking ahead, Meta anticipates that its first-quarter sales for 2026 will fall between $53.5 billion and $56.5 billion.

This forecast surpasses the average analyst estimate of $51.41 billion. Finance chief Susan Li indicated that this positive outlook is largely driven by strong demand observed at the end of Q4 and into 2026.

Anticipated Expenses and Investments in AI

For the upcoming year, Meta expects its total expenses to range between $162 billion and $169 billion. A significant portion of these expenses will go toward capital expenditures related to the company’s artificial intelligence initiatives, which are projected to be between $115 billion and $135 billion.

This anticipated spending is nearly double what the company spent on capital expenditures in 2025, which amounted to $72.2 billion. CEO Mark Zuckerberg stated that the increased investment aims to support the Meta Superintelligence Labs efforts and enhance the company's core business capabilities.

Reality Labs Facing Challenges

Despite the positive overall performance, Meta's Reality Labs unit reported an operating loss of $6.02 billion for the fourth quarter, which was higher than the estimated loss of $5.67 billion. Reality Labs has now accumulated nearly $80 billion in total operating losses since late 2020.

In light of these losses, the company laid off over 1,000 employees from Reality Labs earlier this month, shifting focus towards AI and wearable technology, such as the Ray-Ban Meta smart glasses. Zuckerberg mentioned that 2026 is expected to be the peak year for Reality Labs' losses, with a gradual reduction of losses anticipated moving forward.

Legal and Regulatory Outlook

Meta also acknowledged potential challenges ahead, as regulatory and legal issues in both the European Union and the United States could significantly impact its business and financial results. The company noted that several high-profile social media trials set to commence this year might result in material losses.