Meta Stock Forecast: Strong Earnings and $130B AI Plan Fuels 7% Rally

Shares of Meta Platforms jumped more than 7% following the release of the company’s fourth-quarter earnings report, as investors reacted to stronger-than-expected financial results and growing confidence in the company’s artificial intelligence strategy.

Meta share price (Source: CoinCodex)

The rally came after Meta reported quarterly performance that exceeded analyst forecasts across key metrics, reinforcing the view that its core advertising business remains highly profitable even as the company dramatically increases long-term investment in AI infrastructure.

Meta reported fourth-quarter revenue of roughly $59.9 billion, representing about 24% year-over-year growth and beating consensus expectations. Earnings per share reached approximately $8.88, while net income climbed to roughly $22.8 billion.

The company also continued to expand its global user footprint, reporting about 3.58 billion daily active users across its family of apps, including Facebook, Instagram, WhatsApp, and Threads.

The combination of strong revenue growth, user scale, and continued advertising demand helped offset investor concerns about rising operating costs tied to infrastructure expansion and AI development.

Advertising Remains The Core Profit Engine

Advertising revenue continues to be Meta’s primary source of income and the main driver behind the company’s strong quarterly performance. Robust ad demand, particularly during the holiday period, helped push revenue growth well above expectations.

Meta’s ability to monetize its massive user base remains a central pillar of investor confidence. Even as costs rise, the company continues to generate substantial cash flow, allowing it to fund aggressive research and infrastructure investments without significantly weakening its balance sheet.

The strong performance also reinforced a broader narrative across the technology sector, where large platform companies are increasingly valued not only for software products but also for their role as builders of next-generation AI infrastructure.

AI Spending Becomes The Central Investor Focus

A major driver behind the stock surge was Meta’s forward guidance on AI spending. The company signaled plans to dramatically increase capital expenditures, projecting 2026 CapEx between roughly $115 billion and $135 billion.

The spending is expected to support large-scale data center expansion, custom AI hardware development, and proprietary model training.

Meta leadership has framed 2026 as a pivotal year for the company’s AI transformation, with executives positioning the company as a long-term AI infrastructure and platform provider rather than purely a social media company.

Despite the heavy spending outlook, investors appear willing to accept near-term margin pressure in exchange for potential long-term leadership in AI. The company expects total 2026 expenses to reach approximately $162 billion to $169 billion, largely driven by infrastructure and AI talent costs. 

Meta Stock Price Attempting To Breach Resistance

With the recent rally, Meta’s share price has managed to break out of a short-term descending price channel. Now, the company’s stock is attempting to overcome a strong technical resistance.

Meta price chart (Source: TradingView)

At the time of writing, the Meta share price is challenging the $740 resistance level. A break above this point could lead to a surge to as high as $780 in the coming few days. Conversely, a rejection might lead to a pullback all the way down to the $670 support level. This mark is also confluent with the upper boundary of the aforementioned bearish channel.

From a technical perspective, the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) show that buyers have an upper hand in terms of momentum and strength.

The RSI soared past its Simple Moving Average (SMA) in the past 72 hours, signaling a bullish shift in strength. Now, the RSI line is positively sloped, and the current reading below 90 suggests that Meta’s share price has not yet reached overextended conditions. 

In the last few days, the MACD line also crossed above the MACD Signal line to indicate that momentum has turned in favor of bulls. With the gap between these two technical indicators still growing, it appears the momentum shows no signs of slowing down yet.