Facebook-owner Meta Platform’s (META) latest earnings report delivered exactly what investors were hoping to see: a core advertising business that continues to compound at a healthy pace. Paired with clear evidence that the company’s massive AI spending push is translating into real performance and profit, it made for compelling reading.
Meta stock jumped nearly 8% in after-hours trading, adding an extra $140 billion to the market cap.
| Meta Platforms (META) | Price: $720.64 | Market cap: $1.82tn |
Cruciall, the report showcased a resilient core advertising business and early proof that the company’s aggressive AI investments are already boosting performance. Equally interesting, while Meta again signalled significant increases in expenses and capital spending, executives emphasised confidence that profitability will continue to rise in 2026, framing the company’s heavy reinvestment as a product of strength, not strain.
Q4 numbers beat
Meta reported Q4 revenue of $59.89 billion, topping consensus estimates of roughly $58.35 billion. Earnings per share came in at $8.88, also ahead of expectations. The company posted a 41% operating margin, lower than last year but still robust given Meta’s 24% year‑over‑year revenue growth and substantial operating income.
Advertising once again powered the results, but the composition of that growth stood out. Total ad impressions rose 18%, while the average price per ad increased 6%, a combination that points to both rising demand and improved ad performance rather than simply increasing ad load.
‘The average price per ad increased 6% year-over-year, benefiting from increased advertiser demand, largely driven by improved ad performance’, said CFO Susan Li. The company attributed continued gains to advances in AI‑driven content recommendations and ad‑ranking systems, which have helped lift engagement without diminishing user experience.
AI capex paying off
What distinguished this earnings cycle was Meta’s unusually explicit linkage between its AI investment surge and measurable improvements in monetisation. Li detailed how scaling large ranking models, including Meta’s GEM architecture, is feeding improvements into lightweight inference models that operate in real time.
In Q4 alone, Meta said these systems generated a 3.5% increase in ad clicks on Facebook, more than a 1% rise in conversions on Instagram, and a new runtime model helped deliver a 3% lift in conversion rates across key Instagram surfaces.
For investors wary of rising capex, the clear translation of AI spending into revenue and conversion gains offered reassurance against another hike in capex.
Including finance lease payments, Meta said it will spend between $115 billion–$135 billion this year, significantly above prior analyst expectations.
Investors heard Meta signal two things clearly. First, capex continues to rise like it did during its most aggressive growth periods.
But second, earnings are at a level that reflects its current scale and momentum. That balance appears, for now, to be enough to sustain market confidence.
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