META Stock Price Forecast - META Jumps on $59.9B Q4 and $135B AI Push – Why It’s Still a Buy

META (NASDAQ:META): AI CapEx Explodes While Earnings Muscle Still Points To A BUY

Earnings power and operating performance in Q4 2025

Meta Platforms, Inc. (NASDAQ:META) closed 2025 by proving that the core business is still a cash machine even at peak investment intensity. Revenue in Q4 2025 reached about $59.9 billion, roughly 24% year-on-year growth, with the Family of Apps generating approximately $58.3 billion from advertising alone. That is not marginal upside; that is a double-digit growth rate at a trillion-dollar platform driven by robust online shopping demand and strong holiday budgets. Operating income of roughly $24.7 billion translates into an operating margin around 41%, a level that most companies never touch even in low-investment years. Diluted EPS came in at $8.88, up roughly 11% YoY and ahead of consensus estimates in the low $8.20 range, confirming that Meta is not just maintaining profitability under heavy AI spending, it is expanding it. Daily active people across the family of apps reached around 3.58 billion, growing in the mid-single digits, but the more important signal is monetization quality. Ad impressions continued to rise, and average price per ad increased at the same time. In key regions such as the US and Canada, advertising prices climbed about 9% YoY, outpacing roughly 5% consolidated revenue growth in those markets. Reels remains a major driver, with US watch time up more than 30% YoY, showing that Meta can still shift engagement into newer formats and monetize them more aggressively. The combination of high single-digit user growth, double-digit revenue expansion and 40%+ operating margins in a peak CapEx year is exactly what supports an equity story that is still not fully priced into the shares.

Free cash flow generation and balance sheet capacity

Behind the income statement, the cash engine remains decisive. Operating cash flow in Q4 2025 was around $36.2 billion, growing close to 30% YoY. Capital expenditures on property and equipment in the quarter surged to roughly $21.4 billion, almost 50% YoY growth as Meta accelerated AI data-center builds and networking infrastructure. Even after this spending, free cash flow for Q4 reached about $14.1 billion, up around 7% YoY, with a free cash flow margin of roughly 23.5%. That margin is lower than the 27%+ levels seen in earlier, lighter CapEx periods, but it is still world-class. Across 2025 the company generated enough free cash flow to finance an unprecedented AI build-out and still return about $26.2 billion through share repurchases. Importantly, Meta is not leaning on aggressive debt issuance or equity dilution to fund its AI strategy. The internal cash generation is sufficient to cover infrastructure, acquisitions and buybacks simultaneously. That puts Meta in a very different category from many AI-themed names that depend on the market’s willingness to fund losses with new capital.

2026 guidance: CapEx shock without sacrificing operating income

The 2026 guidance is deliberately aggressive on investment while still promising earnings growth. Management expects Q1 2026 revenue between $53.5 billion and $56.5 billion. Total 2026 expenses are projected in the $162–169 billion range. The centerpiece is capital expenditures: $115–135 billion for 2026, up sharply from around $72 billion in 2025, implying a step-up of roughly 60–90%. That is one of the largest single-year CapEx ramps ever announced by a consumer-internet company. Despite that, Meta expects 2026 operating income to exceed 2025 operating income. Tax rate guidance sits around 13–16%, which is consistent with recent years. If Meta executes even close to these numbers, the message is unambiguous: the core ads and apps franchise is strong enough to absorb a near-doubling of AI CapEx and still deliver higher operating profits. Once CapEx intensity normalizes later in the decade, the operating leverage embedded in this structure will be substantial.

AI architecture, product roadmap and internal productivity

The CEO framed 2025 as the year Meta rebuilt the foundations of its AI program and positioned 2026 as the pivot year when AI starts to reshape how work is done across the company. Management plans to ship a fresh wave of models and products through 2026, emphasizing the trajectory of improvement rather than just the first release. Strategically, Meta is not trying to be a generic cloud-AI vendor first. The company is integrating large language models directly with the recommendation systems that already power Facebook, Instagram, Threads and the ad platform. The goal is to move from apps that feel like feed algorithms to apps where a personal AI agent understands the user’s context deeply and can both surface and generate content tailored to that context. That should support higher engagement, better ad relevance and ultimately higher ad pricing. The AI push is already visible in internal metrics. Since early 2025, output per engineer is up about 30%, and for power users of AI coding tools, output is up around 80%. At Meta’s scale, those productivity gains translate into billions of dollars of avoided incremental headcount and faster feature velocity. As AI tools diffuse through more teams, Meta’s cost base and time-to-market profile should structurally improve.

AI capital allocation and strategic deals

The AI build-out is not just rhetoric; it is written directly into the capital-allocation line items. Alongside the $115–135 billion 2026 CapEx plan dominated by AI infrastructure, Meta has signed a fiber-supply agreement with Corning reportedly worth up to $6 billion, securing long-term networking capacity for data centers. In parallel, the company committed about $14.3 billion to acquire a 49% stake in Scale AI and bring its CEO in as chief AI officer to lead Meta Superintelligence Labs. That gives Meta direct access to top-tier annotation, tooling and model-evaluation capabilities. The acquisition of Manus, in the $2 billion range, expands Meta’s position in general-purpose autonomous AI agents. Combined, these moves show a coordinated push: own the compute, own the fiber, own the models and bring in key talent. The risk is obvious – this level of spending requires confidence that AI-driven monetization and efficiency gains will ultimately exceed the cost of capital. The upside is equally clear: if Meta succeeds, it will have one of the deepest vertically integrated consumer AI stacks on the market.

Reality Labs losses, metaverse reset and glasses strategy

Reality Labs remains the biggest drag on reported profitability, but the peak-loss phase now appears defined. In Q4 2025, Reality Labs generated roughly $955 million in revenue and posted an operating loss near $6 billion. Management expects 2026 Reality Labs losses to be similar to 2025, and explicitly described this period as likely the peak before losses gradually shrink. The strategic focus in this segment is shifting away from the original, broad “metaverse” vision and toward more tangible hardware like glasses and wearables. Sales of Meta’s glasses reportedly more than tripled over the last year, providing a clearer path to consumer products that could sit on top of Meta’s AI infrastructure. Layoffs in the division underline that capital is being reweighted toward projects with better line-of-sight to adoption. The base case is that Reality Labs continues to drag on consolidated margins in the near term, but if 2025–2026 truly mark the high-loss plateau, the earnings overhang from this segment should start to fade over the next several years.

Regulatory, legal and political risk around social media and youth

The non-technical risk cluster is centered on regulation, youth safety and antitrust. Meta is facing a landmark trial over allegations that social media products were designed to be addictive and harmful to young users. Zuckerberg has been ordered to testify, and unlike congressional hearings, testimony in court carries significantly higher litigation risk. Several jurisdictions are moving toward stricter youth restrictions. Australia has implemented a ban on social media for under-16s, and France is considering a similar path. In the US, the FTC is appealing its loss in an antitrust case that targeted Meta’s acquisitions of Instagram and WhatsApp, aiming to challenge the company’s entrenched position in personal social networking. European regulators are pressing for tighter controls on personalized advertising and youth-oriented features. Management explicitly acknowledges that youth-related trials scheduled for this year could result in a “material loss.” These headwinds do not destroy the business model, but they anchor a persistent discount in the valuation multiple. For any investor taking a view on Meta (NASDAQ:META), this legal and regulatory drag is part of the thesis, not an external surprise. Tracking governance and insider behavior around these risks via the META stock profile and META insider transactions remains essential.

Datacenters, energy scrutiny and the AI bubble narrative

The AI build-out also pulls Meta into the center of the energy and infrastructure debate. Large AI data centers consume significant power and strain local grids, and several US states are reacting. Georgia is leading efforts to pause or restrict new data-center construction until regulators can fully assess the impact on electricity markets, with states such as Maryland and Oklahoma watching or considering related steps. At the federal level, lawmakers are scrutinizing whether big tech companies are indirectly passing higher utility costs from data centers onto consumers. Meta has responded with a public-relations campaign, reportedly spending about $6.4 million on advertising in state capitals and Washington to emphasize job creation. The company cites around 30,000 skilled trade jobs supported during construction and around 5,000 operational jobs tied to data-center operations, though independent reporting suggests long-term permanent employment per facility is relatively modest compared to the initial build phase. Overlaying this, senior executives across technology and finance describe AI as being in a phase of exuberance that resembles a bubble. Large capital budgets everywhere will not all earn their cost of capital. For Meta, the question is binary for the equity story: does the combination of AI-driven revenue, pricing power and productivity justify $115–135 billion of 2026 CapEx, or does it compress returns on incremental capital? That question will drive multiple expansion or compression far more than short-term headlines.

Valuation, peer comparison and embedded expectations

On valuation, Meta (NASDAQ:META) continues to trade at a discount to several mega-cap technology peers despite its growth and profitability profile. With the stock around $668.73 at the last close and pre-market quotes around $728–729, market capitalization is about $1.69 trillion. The trailing P/E multiple is roughly 29.6x, with a token dividend yield near 0.31% and a 52-week range of $479.80–796.25. Looking forward, Street estimates for FY 2027 EPS are around $33.06. On that basis, one detailed analysis puts the forward P/E at roughly 20.2x. At a 25x multiple, in line with a big-tech peer group that shares similar structural growth and profitability, implied fair value is close to $826 per share. Earlier work framed Meta as undervalued at around 23x forward earnings and about 13.4x price-to-operating-cash-flow once CapEx normalizes. Nothing in the new Q4 numbers weakens that view. In fact, the combination of a revenue beat, a margin profile still north of 40%, and guidance for higher operating income in 2026 under a doubled CapEx burden suggests current multiples are conservative, not stretched. The valuation discount reflects two beliefs baked into the market: that AI and Reality Labs spending could be structurally value-destructive, and that regulation will structurally cap monetization. If either of those assumptions proves too pessimistic, there is room for multiple expansion on top of earnings growth.

Ad concentration, macro sensitivity and what would break the thesis

The core business risk is concentration in digital advertising. Meta remains heavily dependent on ad budgets, and a cyclical downturn in global advertising or a sharp US recession would directly hit revenue, free cash flow and buyback capacity. Mature markets are mostly relying on pricing gains and product mix rather than large user additions, so any regulatory intervention that sharply limits targeting would pressure CPMs and weaken the monetization curve. From a thesis perspective, there are clear break points to watch. If free cash flow margins were to trend structurally below 20% outside of peak investment years, the quality of the franchise would be downgraded. If daily active people growth slows sharply while CPM growth stalls, the market will start to treat Meta as a low-growth, ex-growth ad utility rather than a compounding platform. Finally, if the combination of legal settlements, youth restrictions and privacy rules materially and permanently constrains ad targeting, the long-term margin and growth profile would have to be marked down. At present, none of these triggers has been hit. CPMs are rising in core regions, users are still growing at scale, and free cash flow remains strong even under heavy investment.

Capital returns, insider behavior and structural positioning

Capital-return and insider dynamics reinforce the long view. With $26.2 billion of stock repurchased in 2025 and room to continue buybacks alongside AI CapEx, Meta is actively shrinking the equity base at what remains a discount multiple versus peers. The balance sheet has the capacity to keep funding CapEx, acquisitions and buybacks without stressing leverage ratios. For a stock at this market-cap scale, ongoing repurchases at reasonable valuations add meaningful per-share leverage to earnings growth. Monitoring insider activity through the META insider transactions feed is important: aggressive insider selling into AI enthusiasm would be a concern, while neutral or net buying behavior would underscore management confidence in the multi-year plan. Structurally, Meta sits at the intersection of the largest global social graph, one of the most profitable ad platforms in history and a rapidly scaling AI infrastructure stack. When that is combined with disciplined capital returns and internal funding of investments, the long-term positioning remains strong.

Buy, sell or hold: why META (NASDAQ:META) still screens as a BUY

Pulling the data together, the investment case still leans clearly to the upside. Meta (NASDAQ:META) is growing revenue around 24%, holding operating margins near 41%, and generating more than $14 billion in quarterly free cash flow despite a historic CapEx ramp. Guidance for higher operating income in 2026 under $115–135 billion of CapEx implies enormous latent operating leverage once AI spending matures. The stock trades at roughly 20–23x forward earnings with credible mid-teens EPS growth potential and embedded AI optionality that is not fully reflected in current multiples. Regulatory and political risks, youth-safety litigation and AI-bubble concerns are real and must be priced in, but they are not yet undermining the fundamental earnings engine. The central swing factor is execution: whether AI and infrastructure spending convert into durable monetization and cost advantages rather than capital misallocation. On the current numbers and guidance, the balance of probabilities still favors upside. Taken together, this supports a decisive stance: META (NASDAQ:META) is a BUY, with a bullish bias toward new highs in 2026, grounded in earnings power, AI-driven moat expansion and a still undemanding valuation relative to its mega-cap technology peers.

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