Meta Platforms Inc. (META) delivered a knockout fourth quarter report with revenue, profit, and a current quarter forecast that crushed the average analyst estimate, helping investors overlook the Mark Zuckerberg-led company’s heavy spending budget as it transforms into an artificial intelligence behemoth.
The company said that despite its substantial increase in AI infrastructure investment, this year’s operating income is still expected to be higher from 2025.
Shares of the company rose as much as 11% but pared some gains and are currently up 7.5% in early open market trading on Thursday.
Word on the Street
Wedbush (rating “outperform,” PT hiked by $20 to $900) “Sentiment has turned more constructive following the report, as the aggressive level of investment within the current cycle is already delivering healthy revenue upside versus expectations and signals a commitment towards longer-term strategic objectives,” the research firm said.
“Ongoing investments across the business, including the infusion of AI capabilities across the company’s ad stack and content recommendation engines, are already driving tangible benefits for the core advertising segment. We are also encouraged by commentary around the rebalancing of resources within Reality Labs.”
Jefferies (rating “buy,” PT raised by $90 to $1,000) believes Meta’s strong AI-driven top-line reacceleration should continue to help validate ROI.
“META gave multiple datapoints showing AI is driving core flywheel: video gen tools hitting a $10B run rate, IG Reels watch time +30% y/y from Q4 optimizations & model rollout driving a 24% increase in incremental conversions,” Jefferies said in their flash commentary.
Morgan Stanley (rating “overweight,” PT raised by $75 to $825) “META’s investments in engagement/monetization are leading to the fastest growth in 4+ years (when the business was half the size it is now). ROIC is on display with the LLM product pipeline set to bud in ’26 for more long-term optionality ahead,” the research firm said.
“META’s budgeting process this year (like ’25) has yielded a robust pipeline of further improvements to come…to drive more durable engagement and revenue growth. We think META’s runway to further improve engagement and monetization is long as it better analyzes its data and improves its recommendation engines with a growing suite of data, tools, and products.”
RBC Capital Markets (rating “outperform,” PT $810) “Looking at FY26, META anticipates an increase in Capex compared to FY25, driven by increased investment in Meta Superintelligence Labs efforts and its core business, particularly in data centers, servers, and network infrastructure,” the research firm said.
“In possessing both the largest user base as well as the deepest amount of knowledge (data) of that user base, we believe META can compound 15–20%+ earnings growth once it getsthrough its currently elevated investment cycle around AI, which is aimed at driving engagement share gains while also restoring it to being the dominant player in social media with structural advantages around ad targeting.”
Mizuho (rating “outperform,” PT hiked by $35 to $850) “The conversion slope on AI investment payoff could be steeper than they expect, implying room for further potential revenue upside from here. Better models are driving meaningful acceleration in conversion growth, which is significantly outgrowing impressions, and we believe this trend can continue to support double-digit ad revenue growth,” the research firm said.
Wolfe Research (rating “outperform,” PT hiked by $50 to $850) “We are reiterating Meta as one of our top picks for 2026 as we see our thesis prove out—accelerating revenue growth to support elevated CapEx, RL losses to peak this year, AI narrative to potentially improve, and P/E valuation gap vs. peers to narrow,” the research firm said.
“Our Outperform rating is based on our long-term view that the company’s scale, AI investments, category leadership position, and product catalysts should enable META to outgrow the digital advertising market, gain scale, and generate new sources of revenue.”
Truist Securities (rating “buy,” PT hiked by $25 to $900) “We’re buyers of META on stronger 4Q results and impressive 1Q guide (+30% growth at midpoint, fastest since 3Q21) reflecting robust ad demand fueled by AI improvements across ad recommendations, monetization, and user engagement,” the research firm said. “Ongoing improvements to recommendation models and building new, more complex AI models for the core ad business should help the company grow faster for longer and should re-accelerate margin expansion in the outer years.”
Truist believes the company continues to earn the right to invest as long as it delivers “faster top-line growth for longer NT and higher FCFs LT.”
Seeking Alpha analysts
Kenio Fontes: Meta Platforms, Inc. delivered a strong Q4 double beat, with revenue and EPS significantly above expectations and robust top-line momentum. User growth and ad monetization remain impressive, with daily active people up 7% YoY and ad impressions up 18% YoY. Expense growth, particularly in R&D and G&A, and a 40% YoY increase in 2026 cost guidance raise medium-term META margin concerns. META stock valuation is attractive at 22.6x 2026 P/E, supporting a Buy rating despite expense headwinds and ongoing heavy investment in AI.
Gytis Zizys: Meta Platforms, Inc. delivered strong Q4 and full-year results, with sales up 24% y/y and robust guidance for Q1 2026. META’s aggressive AI-driven capex is set to surge to $115B–$135B in 2026, signaling an all-in push for AI leadership. Reality Labs continues to weigh on margins, but META is pivoting toward AI-powered AR/XR wearables and premium app monetization. I see further upside driven by AI momentum but prefer to hold rather than add at current valuations given portfolio exposure.
Ahan Vashi: Meta Platforms just delivered a triple play quarter for Q4 2025, with quarterly revenue up 24% y/y and EPS handily exceeding consensus. That said, META guided for significant 2026 expense growth, with CAPEX rising to $115-135B, raising ROI and cash flow wobble concerns despite immense balance sheet strength. After a post-earnings surge to ~$729, META is now fairly valued, with a Hold rating recommended in the low-to-mid-$700s. Technical and valuation factors suggest better entry points may emerge, with potential downside targets in the $425-575 range.
Cyn Research: Meta Platforms, Inc.’s core ad business continues to compound at scale, delivering 24% revenue growth and 41% operating margins even in a peak investment year. AI is already improving monetization and efficiency, lifting ad pricing, engagement, and employee productivity without requiring new revenue streams. Strong cash generation allows Meta to fund AI internally while buying back shares, avoiding the debt and dilution risk seen across much of the AI trade. With profits still growing and AI upside largely unpriced, Meta stock remains undervalued.
The Asian Investor: Meta Platforms delivered a blowout Q4, surpassing earnings and revenue estimates on robust holiday-driven ad demand. META maintains exceptional free cash flow, even amid aggressive CapEx, fueling AI investments and strategic acquisitions. Shares remain attractively valued at 20.2X FY 2027 P/E, below big tech rivals, with a fair value target of $826 based on an industry-like 25X P/E. Strong user growth and platform profitability underpin a compelling long-term risk/reward, despite heavy ad revenue dependence.