Meta Platforms is set to report its fourth-quarter 2025 earnings on Wednesday, with Wall Street analysts laser-focused on the company’s AI infrastructure spending plans and expense guidance for 2026. The social media giant’s stock has shown modest gains of approximately 1% year-to-date and 7% over the past 12 months, significantly lagging behind some of its Magnificent Seven peers amid investor concerns about escalating capital expenditures.
Throughout 2025, Meta has consistently signaled its intention to dramatically increase capex spending to support ambitious AI initiatives, a strategy that has generated mixed reactions from investors. The stock tumbled following its Q3 report when the company announced plans to spend more than ever on AI infrastructure going forward. In a notable strategic shift, Meta recently announced it would significantly scale back its metaverse spending, a project CEO Mark Zuckerberg had championed as the company’s future just years earlier.
Wall Street consensus estimates Meta will report $58.4 billion in revenue and earnings per share of $8.19 for Q4 2025. However, the real focus lies on the company’s 2026 expense and capex guidance, with analysts’ projections varying widely.
Bank of America maintains a buy rating with an $810 price target, suggesting concerns about 2026 expenses have been building for five months. Analyst Justin Post indicates that expense guidance around 30% growth could be viewed positively, while guidance at or above 35% would likely be negative. BofA expects Meta’s capex to range between $109-114 billion, likely exceeding the $110 billion consensus.
Deutsche Bank holds a bullish $880 price target and predicts revenue of $59 billion, slightly above estimates. Goldman Sachs has raised its spending projections above consensus, expecting investors to focus on updates from Meta’s Superintelligence Lab and foundational model development.
Rothschild & Co offers one of Wall Street’s highest price targets at $900, viewing Meta as optimally positioned to capitalize on rising AI demand. The firm has increased its full-year capex projection to $117.1 billion. TD Cowen is even more aggressive, expecting 2026 capex of $125 billion, up 76% year-over-year, believing generative AI tools will continue supporting growth in Meta’s advertising business.
Key Quotes
Concerns on ‘26 expenses have been building for 5 months & we think an expense guide at around 30% 2026 growth could be positive, while at/above 35% a negative
Bank of America analyst Justin Post highlighted the critical threshold investors are watching for Meta’s 2026 expense guidance, indicating that expense growth above 35% could trigger negative market reactions despite the company’s AI ambitions.
In our view, Meta is positioned favorably — especially in the long-term — as it doubles down on an AI investment cycle
Deutsche Bank analyst Benjamin Black expressed optimism about Meta’s long-term AI strategy despite near-term expense concerns, suggesting the company’s heavy investments will pay off over time.
The fear is that this is ‘Zuckerberg unleashed’, with the company’s CEO truly back in ‘founder mode’, pursuing his AI dreams whatever the financial cost
Rothschild & Co analyst James Cordwell captured investor anxiety about Mark Zuckerberg’s aggressive AI spending approach, drawing parallels to the CEO’s previous metaverse push and raising questions about financial discipline.
On the next earnings call, we expect investors will be focused on any updates on the work of the Meta Superintelligence Lab, the timing of any foundational model work and/or any strategies with respect to consumer or enterprise utility around AI
Goldman Sachs analysts outlined the key technical and strategic AI developments investors will be listening for, emphasizing the importance of Meta’s foundational model progress and practical AI applications.
Our Take
Meta’s earnings report will serve as a bellwether for the AI industry’s massive infrastructure investment cycle. The stark contrast between analyst projections—ranging from cautiously optimistic to aggressively bullish—reveals fundamental uncertainty about AI monetization timelines. What’s particularly telling is Meta’s pivot away from the metaverse, a reminder that even visionary tech leaders can misallocate capital. The question now is whether AI represents genuine transformative opportunity or another expensive detour. The focus on Meta’s Superintelligence Lab suggests Wall Street is demanding more concrete evidence of differentiated AI capabilities beyond generic infrastructure spending. If Meta can demonstrate clear ROI from AI-powered advertising improvements, it could validate the broader industry’s spending spree. However, if guidance disappoints or lacks specificity, we could see a broader reassessment of AI capex across Big Tech.
Why This Matters
Meta’s Q4 earnings report represents a critical inflection point for the AI industry’s investment cycle and investor sentiment toward massive AI infrastructure spending. As one of the Magnificent Seven tech giants, Meta’s capex guidance will likely influence broader market expectations for AI spending across the sector. The company’s willingness to dramatically scale back metaverse investments while simultaneously doubling down on AI demonstrates how quickly strategic priorities can shift in the tech industry.
The wide range of analyst projections—from $109 billion to $125 billion in 2026 capex—reflects genuine uncertainty about the sustainability and returns of massive AI infrastructure investments. Meta’s earnings call will provide crucial insights into whether AI applications, particularly in advertising, are generating sufficient returns to justify unprecedented spending levels. The focus on Meta’s Superintelligence Lab and foundational model development also signals Wall Street’s interest in understanding how tech giants plan to differentiate their AI offerings and achieve competitive advantages. This earnings report could set the tone for how investors evaluate AI spending across the entire technology sector in 2026.
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