Meta Increases Annual Capex for Superintelligence, Shares Soar

Meta Platforms, Inc. has announced a significant increase in its capital expenditures as it aims to achieve advancements in artificial intelligence. The company has raised its spending plans by 73% for the current year, focusing on a strategy the CEO, Mark Zuckerberg, describes as a pursuit of “superintelligence.”

Investments in AI and Future Forecasts

During a conference call, Zuckerberg stated, “This is going to be a big year for delivering personal superintelligence.” The company’s ad platform will support these investments, which will also face rising competition in the short-video market.

For 2026, Meta anticipates capital expenditures ranging from $115 billion to $135 billion. This projection exceeds earlier expectations of $109.9 billion and marks a substantial increase from last year’s expenditures of $72.22 billion.

Drivers of Increased Expenditure

• Infrastructure costs, including payments to third-party cloud providers.
• Higher depreciation costs for AI data center assets.
• Increased operational expenses related to infrastructure.

Meta is striving to establish several large-scale AI data centers to meet its computing demands. Revenue from advertising, which surged to $58.14 billion in the fourth quarter, is helping fund these ambitious projects.

Competitive Landscape

Meta’s recent initiatives include launching ads on WhatsApp and Threads, thereby competing directly with platforms like Elon Musk’s X. Meanwhile, Instagram’s Reels is striving to capture market share from emerging competitors such as TikTok and YouTube Shorts.

John Belton, a portfolio manager at Gabelli Funds, noted Meta’s current valuation as attractive, largely due to its robust core business, bolstered by AI infrastructure.

Capacity Constraints and Long-Term Opportunities

To support its AI ambitions, Meta has signed partnerships with various service providers, including Alphabet and CoreWeave. However, CFO Susan Li acknowledged that the company may face capacity constraints throughout much of 2026.

Long-term investors may view 2026 as a transitional year where the company’s advertising business will continue generating cash flow to support its AI transformation.

Revenue and Market Positioning

For the upcoming first quarter, Meta expects revenue between $53.5 billion and $56.5 billion, surpassing analyst expectations of $51.41 billion. In contrast, shares of Microsoft fell by 6.5% following its earnings report, despite a 66% increase in capital spending.

Meta’s projections for total expenses in 2026 range between $162 billion and $169 billion, up from $117.69 billion a year prior. This increase is attributed to rising compensation costs as the company actively recruits top talent in AI.

As Meta continues to expand its investments in superintelligence, it appears to be positioning itself as a formidable competitor in the AI landscape.