Meta forecasts up to $135 billion capex in 2026

CALIFORNIA: Meta Platforms is going all in. The Instagram and Facebook owner has sharply raised its capital expenditure for 2026 to between $115 billion and $135 billion, nearly double last year’s spend, signalling CEO Mark Zuckerberg’s aggressive push toward artificial superintelligence. Investors cheered, sending shares higher, buoyed by robust advertising growth.

Speaking to analysts, Zuckerberg called 2026 a “pivotal year” for Meta, highlighting the focus on delivering highly personalised AI capabilities while reshaping internal operations.

The spend surge is driven by infrastructure costs, higher depreciation from AI data centres, and rising operating expenses linked to compute-intensive workloads. Meta has secured capacity deals with external providers including Alphabet, CoreWeave and Nebius, though capacity constraints are expected through much of the year, according to chief financial officer susan li.

Meta’s fourth-quarter performance underpinned confidence in the strategy. Advertising revenue, still the core engine, jumped 24 per cent year on year to $58.14 billion, up from $46.78 billion a year earlier. Strong ad cash flows helped the company beat earnings expectations and issue a first-quarter revenue forecast of $53.5–$56.5 billion, well above analyst estimates.

Despite the ad boom, capital expenditure surged 49 per cent, contributing to a decline in operating margin as infrastructure costs accelerated. Meta has been able to fund its AI ambitions largely through advertising, which benefits from AI-driven improvements in targeting and campaign automation. New monetisation channels on WhatsApp and Threads, and competition in short-form video via Instagram Reels, have further strengthened the ad engine.

Meta also projected total expenses for 2026 between $162 billion and $169 billion, reflecting infrastructure costs and rising employee compensation as the company hires aggressively for AI roles in a tight talent market.

“2026 will redefine how Meta works as AI reshapes teams and productivity,” zuckerberg said, underscoring the company’s commitment to superintelligence, a theoretical stage where machines outperform humans across a broad range of tasks.

Market watchers said investors appear comfortable with Meta’s high-stakes strategy, noting that generative AI returns may take time, but the company’s advertising cash flows are strong enough to absorb heavy spending. The outlook contrasts with Microsoft, which also ramped up capital expenditure but saw shares fall amid modest cloud growth.

Meta is charging full throttle into 2026, betting big on AI while keeping the ad engine roaring — and the world is watching.