During a Q4 earnings call, Meta Platforms‘ CEO Mark Zuckerberg unveiled the company’s plans to continue its massive spending spree on AI talent and infrastructure but expects losses in its Reality Labs division to continue.
Meta expects full-year capital expenditures to be $115 billion to $135 billion, with year-over-year growth driven by increased investments to support its Meta Superintelligence Labs efforts. Bloomberg reported analysts had projected capital expenditures of $110 billion.
Last year, Zuckerberg poured billions of dollars into increasing the company’s AI infrastructure and compute while also revamping its AI teams to beat rivals such as Microsoft, OpenAI and Google in the development of superintelligence.
“We are now seeing a major AI acceleration,” he said on the earnings call. “I expect 2026 to be a year where this wave accelerates even further on several fronts. We’re starting to see agents really work,” he added. “This will unlock the ability to build completely new products and transform how we work”.
Meta will release its new large language models over the coming months and merge them with the recommendation systems which power Facebook, Instagram, Threads, and its ads system.
“We’ll be able to understand people’s unique personal goals, and tailor feeds to show each person content that helps them improve their lives in the ways that they want,” he said. Zuckerberg explained new agentic shopping tools will allow people to find “just the right very specific set of products from the businesses in our catalogue”, going forward.
The social media giant expects Q1 2026 revenue will be $53.5 billion to $56.5 billion, topping the $51.3 billion average analyst estimate.
Reeling Reality Labs
Meta’s Reality Labs division, which develops VR and AR technologies as part of Zuckerberg’s vision to create a metaverse, recorded an operating loss of $6 billion on $955 million in revenue.
Zuckerberg was so enamoured with the prospect of the metaverse he changed to the current name four years ago from Facebook. CNBC reported Reality Labs has over $75 billion in total operating losses since late 2020.
“I expect Reality Labs losses this year to be similar to last year, and this will likely be the peak as we start to gradually reduce our losses going forward while continuing to execute on our vision,” he said. The news site noted Meta laid off more than 1,000 Reality Labs employees in early January 2026 as it shifted resources to AI and wearable glasses.
Meta delivered $59.8 billion in revenue for the quarter, compared to consensus analyst estimates of $58.4 billion, for a 24 per cent year-over-year increase. It reported a net income of $22.7 billion, which was up 9 per cent.
“We ended 2025 strong with more than 3.5 billion people now using at least one of our apps every day”, Zuckerberg said. “That includes more than 2 billion daily actives each on Facebook and WhatsApp and just shy of that on Instagram”. He continued: “Our business also performed very well thanks to record-breaking holiday demand and AI-driven performance gains”.
Source: Mobile World Live
Image Credit: Meta
