Meta announced plans to spend between $115 billion and $135 billion on capital investments in 2026, a 73% increase from 2023 spending of $72.22 billion. The company said the money will fund AI data centers, cloud provider payments, and infrastructure to support its goal of achieving superintelligence. According to Reuters, the new budget far exceeds the $109.9 billion analysts had expected.
Advertising Revenue Drives AI Investment
Meta’s advertising business brought in $58.14 billion in the fourth quarter, up 24% from $46.78 billion a year earlier. The growth came from new ad placements on WhatsApp and Threads, which now compete with platforms like X and TikTok. Instagram Reels also continues to attract advertisers in the short-video market.
CEO Mark Zuckerberg said on a call with analysts that 2026 will be a big year for delivering personal superintelligence. The company aims to build AI systems that can surpass human intelligence. Meta has signed contracts with Alphabet, CoreWeave, and Nebius to expand compute capacity. Chief Financial Officer Susan Li said the company will face capacity limits through much of 2026.
Rising Costs and Operating Margins
Costs and expenses rose 40% in the fourth quarter, outpacing revenue growth and cutting operating margin by 7 percentage points. Meta expects total expenses between $162 billion and $169 billion in 2026, up from $117.69 billion in 2025. Higher employee pay drives much of the increase as the company hires top AI talent for its Superintelligence Labs unit.
Investors Back Long-Term AI Bet
Meta shares rose 10% in after-hours trading following the announcement. Investors responded to strong ad revenue and first-quarter sales guidance between $53.5 billion and $56.5 billion, above the $51.41 billion analysts expected. John Belton, a portfolio manager at Gabelli Funds, said Meta’s valuation is not demanding given the returns from its core business.
Jesse Cohen, a senior analyst at Investing.com, said long-term investors likely view 2026 as a transition year. The advertising business generates enough cash to fund AI research while Meta builds the infrastructure needed for superintelligence. The company’s spending contrasts with Microsoft, which also reported a 66% capital increase but saw shares fall 5% after modest cloud revenue growth.
