By Daniel Howley

Meta (META) announced its fourth quarter earnings on Wednesday, topping analysts' expectations on the top and bottom lines.

The company also provided its 2026 capital expenditures guidance, saying it anticipates spending between $115 billion and $135 billion in 2026, up from the $72.22 billion the company spent in 2025.

Meta stock jumped as much as 10% following the news.

In Q4, Meta reported earnings per share (EPS) of $8.88 on revenue of $59.9 billion, ahead of the $8.16 and $58.4 billion analysts were expecting based on Bloomberg analyst consensus estimates.

Read more: Live coverage of corporate earnings

Meta’s Reality Labs division brought in $955 million versus an anticipated $959 million. But the company also booked losses related to the segment of $6 billion. Analysts were expecting an operating loss of $5.9 billion.

Meta isn’t alone in pouring billions into AI data centers. Advertising and AI rivals Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) are also dumping enormous sums into their own data centers.

Meta has also spent lavishly on splash AI hires, including by spending $14.3 billion to purchase 49% of Scale AI and hire its CEO, Alexandr Wang, to serve as Meta’s chief AI officer and run its Superintelligence Labs.

But Meta has also run into some trouble with its newest AI models, including long delays to its Llama 4 Behemoth.

According to CNBC, the company is also considering making its next major AI model proprietary, moving away from the open-weights strategy that allows third-party developers to access Meta’s models, improving them over time.

Meta CEO Mark Zuckerberg wears the Meta Ray-Ban Display glasses as he delivers a speech presenting the new line of smart glasses at the company's headquarters. REUTERS/Carlos Barria. REUTERS / Reuters

The company also recently cut jobs in its metaverse division, with plans to use some of the savings on its wearables initiatives, including its AI smart glasses.

The various maneuvers have created a sense that Meta is scrambling to keep up in the AI race, despite starting 2025 as a strong leader in the space. Google, with its Gemini 3 model, is now in the pole position, outpacing even ChatGPT developer OpenAI.

Meta is also contending with increasing calls for social media bans for children under 16. Australia has already enacted its own ban, and France is considering similar action.

In the US, the Federal Trade Commission (FTC) announced last week that it is appealing its loss in its antitrust case against Meta, which alleged that the company purchased Instagram and WhatsApp because it saw them as rivals that would hurt its leadership role in the personal social networking services market.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

Source: Yahoo Finance