Meta has delivered a stellar financial performance for the fourth quarter of 2025, defying Wall Street expectations despite heavy spending on artificial intelligence infrastructure and ongoing legal challenges. The tech giant reported revenue of $59.89 billion, exceeding analyst forecasts of $58.59 billion, with earnings per share reaching $8.88 against an anticipated $8.23. Following the announcement, Meta's stock surged nearly 10% in after-hours trading, signalling strong investor confidence.
AI Acceleration and Strategic Shifts
Founder and CEO Mark Zuckerberg emphasised the company's commitment to advancing AI during the earnings call, stating, "We had strong business performance in 2025. I'm looking forward to advancing personal superintelligence for people around the world in 2026." This vision is backed by substantial investments, including a recent deal worth up to $6 billion with Corning to supply fibre optic cables for Meta's data centres, part of a broader multibillion-dollar expansion into AI infrastructure.
Zuckerberg described a "major AI acceleration" that aims to transform user experiences across Meta's platforms. He explained, "Today, our apps feel like algorithms that recommend content. Soon, you'll open our apps and you'll have an AI that understands you and also happens to be able to show you great content or even generate great personalised content for you." This shift involves merging large language models with existing recommendation systems on Facebook, Instagram, Threads, and Meta's advertising network.
Financial Outlook and Cost Concerns
Meta projects spending between $162 billion and $169 billion in 2026, with the bulk allocated to infrastructure costs and employee compensation, particularly new hires to support AI growth. While investors have expressed unease over these high expenditures amid broader fears of an AI financial bubble, Zuckerberg remains optimistic, asserting that these investments will yield long-term profitability. He reiterated this stance when questioned about revenue generation from AI in the coming years.
Concurrently, Meta is scaling back its focus on virtual reality and the metaverse, a previous $10 billion priority. Reports indicate the company laid off over 1,000 employees from its Reality Labs division this week, representing 10% of the unit. Zuckerberg noted that losses from Reality Labs are expected to mirror last year's $6.02 billion deficit on $955 million in sales, with future investments concentrated on glasses and wearables, which saw sales more than triple in 2025.
Legal and Environmental Challenges
As Meta intensifies its AI push, it faces mounting scrutiny on multiple fronts. Zuckerberg has been ordered to testify in a landmark trial alleging that social media companies, including Meta, designed addictive and harmful products for young people. This marks the first time such allegations will be addressed in open court, potentially subjecting Zuckerberg to rigorous questioning from prosecutors, unlike his previous congressional testimonies.
Additionally, data centres are under political fire for their environmental and economic impact. States like Georgia, Maryland, and Oklahoma are considering legislation to regulate or halt new constructions, while Democrats in Congress probe reports of tech firms passing soaring utility costs to consumers. In response, Meta launched a $6.4 million advertising campaign in late 2025 to promote data centres as job creators, claiming they support 30,000 skilled trade jobs during construction and 5,000 operational roles, though the geographic scope of these figures remains unclear.
Despite these hurdles, Meta's robust quarterly results underscore its resilience and strategic pivot towards AI, positioning the company for continued growth in an evolving digital landscape.
