Meta shares fell, investors worried about the rising costs of Big Tech’s AI push.
Meta is projecting up to $135 billion in capital spending for 2026.
Bulls point to ad growth and AI advancements. Bears, however, are stressing cash flow.
Meta Platforms fell 1.3% on Friday, as investors shied away from rising artificial intelligence costs — despite Meta’s pitch for AI as a driver of its future growth. “The market’s view is that the AI construction business … has become too expensive,” said Andrew Wells, chief investment officer at San Jac Alpha.
Timing is key here. Major U.S. tech giants have released figures that seem less about fueling another “investment cycle” and more in line with a stress test scenario, leaving markets scrambling for results. “Investors are not forgiving of big investments right now, without a clear indication of a return on invested capital,” Morgan Stanley analysts said.
Meta shares fell as the industry digested bold spending signals from rivals. Amazon and Alphabet have also stumbled in recent sessions after highlighting much sharper budgets. Nvidia, a provider of AI chips and servers, instead moved higher.
Meta is projecting capex in the range of $115 billion to $135 billion for 2026, up from the $72.22 billion it marked for 2025, its latest quarterly statement showed. That spending includes big-ticket items like data centers, servers and chips.
Mark Zuckerberg, Meta’s chief executive, is casting the company’s latest move as a sprint toward “personal superintelligence.” He told analysts to expect “a big year” for infrastructure and internal operations. The increase in expenses comes from rising third-party cloud charges, higher depreciation associated with AI data center assets, and higher infrastructure operating costs, according to a Reuters report.
Advertising remains at the heart of Meta’s operations, and the latest revenue numbers help explain why investors have been bracing for higher costs. For the fourth quarter, revenue rose 24% from a year earlier, to $59.89 billion. Meta’s suite of apps had an average of 3.58 billion daily active users in December 2025, what the company calls “family daily active users.” Free cash flow for the quarter checked in at $14.08 billion after deducting costs and capital expenditures.
All of this has fueled speculation from bulls that Meta could one day join Nvidia and Alphabet in the $4 trillion club — though that milestone may be a long way off. On Friday, The Motley Fool made the case that Meta’s dominance in social media and advertising could help propel its value to that mark by 2032.
A recent Motley Fool article zeroed in on the near-term hit: As Meta ramps up its AI investments, depreciation and research costs are both eating into profits. The report projected operating margins at 41% for 2025, down from 48% in Q4 2024. It also noted that Meta is still in the early stages of integrating large language models — the tech behind chatbots — into its recommendations and advertising products.
The skeptics aren’t backing down. The Value Portfolio argued in a post on Seeking Alpha that Meta’s post-earnings jump “is not justified.” The note cites rising capex and the ongoing red ink of Reality Labs as risks, suggesting that it could squeeze free cash flow in the future, which could lead investors to take a long time to realize growth.
Here’s the risk: Slowdown hurts, plain and simple. When companies cut marketing budgets, advertising spend drops, and that hurts Meta. The AI push simply adds fixed costs that aren’t easy to untangle in a hurry. If those investments fail to show up on the top line, you could see the stock take a hit—even if user numbers look healthy.
The broader market tone can change quickly. “This is the first time we’ve seen big tech companies … go through a really big capex cycle … and we’re seeing the ups and downs of whether those investments will ultimately translate into results,” said Tom Hanlin, chief investment strategist at U.S. Bank Wealth Management.
For Meta, the immediate questions are more about execution than big-picture strategy: Can it keep ad prices and impressions climbing? Will costs stay in check? And as data center investment accelerates, will cash flow remain solid? Wall Street is eyeing these metrics across the industry, but Meta’s $135 billion headline figure has turned it into perhaps the clearest gauge.
