Meta Beats Q4 Estimates on AI Advertising Efficiency
Meta, the parent company of Facebook, beat Q4 earnings expectations, attributing the strong results to improved efficiency in its AI-powered advertising systems. The company's market capitalization has now surpassed $1.6 trillion, according to one report. The results underscore the central role of AI in driving growth for major technology platforms.
- Meta's Q4 revenue reached $59.89 billion, a 24% year-over-year increase, while earnings per share hit $8.88, handily beating analyst expectations. - The company's "Family of Apps," which includes Facebook, Instagram, and WhatsApp, saw its daily active users grow by 7% year-over-year to 3.58 billion people on average for December 2025. - Advertising revenue, which constitutes 97% of the total, grew to $58.1 billion, driven by an 18% increase in ad impressions and a 6% rise in the average price per ad. - The company announced a significant increase in future investment, projecting capital expenditures for 2026 to be between $115 billion and $135 billion, primarily to build out AI infrastructure. - In contrast to the booming ad business, the Reality Labs division, focused on the metaverse, reported a $6.02 billion operating loss for the quarter, bringing its total losses since late 2020 to over $80 billion. - Following the earnings announcement, Meta's stock rose more than 10% in after-hours trading, and multiple financial analysts, including those from Mizuho and Rosenblatt, raised their price targets for the company. - On February 12, 2026, Meta's board of directors declared a quarterly cash dividend of $0.525 per share. - Specific AI-powered tools are showing tangible results; for instance, video generation tools for advertising have reached a $10 billion revenue run rate.
