The Economic Times·2026-01-28 22:32Core Insights - Meta shares surged over 9% in extended trading following a strong fourth-quarter earnings report that exceeded Wall Street expectations and outlined a significantly higher spending plan for AI initiatives [1][12] Financial Performance - Meta reported earnings per share of $8.88 on revenue of $59.9 billion, surpassing analysts' expectations of $8.16 in EPS and $58.4 billion in revenue [2][13] - The Reality Labs division generated revenue of $955 million, slightly below the expected $959 million, and recorded an operating loss of $6 billion, compared to the anticipated $5.9 billion loss [13] Capital Expenditure Outlook - Meta projected capital expenditures for 2026 to be between $115 billion and $135 billion, a significant increase from the $72.22 billion spent in 2025, highlighting the company's commitment to investing in AI and data center infrastructure [3][11] AI Strategy and Competition - Meta's aggressive push into AI includes a $14.3 billion investment to acquire a 49% stake in Scale AI and appointing its CEO, Alexandr Wang, as chief AI officer [6][13] - The company is facing challenges with its AI projects, including delays with the Llama 4 Behemoth model and potential shifts towards proprietary AI models [8][14] - Job cuts in the metaverse division are being redirected towards developing AI-powered wearables, indicating a strategic shift to remain competitive in the AI landscape [9][14] Regulatory and Political Environment - Meta is encountering regulatory pressures, including a ban on social media use for children under 16 in Australia and similar considerations in France, alongside ongoing antitrust scrutiny in the US [10][14]