META Crushes Earnings, Then Announces Insane Capex. Now What?

Meta Platforms just released its Q4 2025 results, and the numbers are staggering. But as the stock swings between a regular-session dip and a massive after-hours surge, investors are asking: Is Mark Zuckerberg building a gold mine or a money pit?

See, Meta is now printing money. The company’s core advertising engine is firing on all cylinders. Q4 revenue hit $59.89 billion, soundly beating the $58.41 billion expectation. Even more impressive was the bottom line: Earnings Per Share (EPS) came in at $8.88, an 8.4% beat over the $8.19 consensus.

The real “shocker” wasn’t the past, but the future: Meta’s Q1 2026 guidance projects revenue between $53.5–$56.5 billion, which is significantly higher than the $51.4 billion analysts expected. We are looking at a 30% growth acceleration heading into the new year.

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Image by Alexandra_Koch from Pixabay

Is everything rosy?

Not really. There’s certainly the capital expenditure (Capex) figure, which is eye-popping. Meta announced a 2026 capex guidance of $115–$135 billion. To put that in perspective, they spent $72.22 billion in 2025. This cash is being funneled into data centers and Nvidia chips. Initially, the market saw this as “reckless burning” of a healthy balance sheet.

Then why the 10% after-hours explosion?

Investors seem to have realized that Meta is actually monetizing this AI spend. CFO Susan Li noted that advertising demand is “accelerating,” and Zuckerberg is pivotally shifting the narrative. He isn’t just building a chatbot; he’s building “Meta Superintelligence Labs” to merge LLMs with the recommendation systems that power Instagram and Facebook.

Reality Labs lost $6 billion this quarter. When does the bleeding stop?

Zuckerberg is finally putting a “cap” on the metaverse drain. He promised that 2026 will be the peak year for Reality Labs losses, with gradual reductions starting afterward. While a $6 billion quarterly loss is roughly 10% of total revenue, the market is willing to stomach it as long as the 90% (advertising) continues to grow at 20%+ rates.

Is the stock expensive at nearly $700?

Let’s look at the multiples. With a Q4 EPS of $8.88 and full-year 2025 EPS of $23.50, the stock trades at a trailing P/E of around 30x.

• The Bull Case: For a company growing revenue at 24–30%, a 30x multiple is actually not that high compared to other “Magnificent Seven” peers. In fact, we already estimate Meta’s valuation to be $843 per share. We don’t expect significant changes to our price estimate, as better-than-expected growth will be largely offset by higher capex. Still, even after today’s likely gap up, the stock seems to have more than 20% upside potential.
• The Bear Case: You are betting that the $135 billion in AI spending produces a better ROI than just giving that cash back to shareholders.

The Bottom Line

Meta crushed expectations and gave “shock and awe” guidance for 2026. The stock is rallying because revenue acceleration is currently outrunning the massive spending. As long as the ad market stays hot and AI keeps improving user engagement (Reels watch time is already up 30%), the “Year of Efficiency” has officially evolved into the “Year of Superintelligence.”

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