Remember when Mark Zuckerberg decided we all needed to live in a virtual world and basically lit $80 billion on fire trying to make it happen? Well, Meta’s latest earnings suggest the company might have actually learned something from that expensive lesson.
Here’s the deal: Meta just dropped their Q4 numbers, and for once, their massive spending spree on AI is actually paying off. Unlike the metaverse money pit, this time they’re seeing real returns.
The Numbers Don’t Lie (For Once)
Meta pulled in $59.9 billion in revenue last quarter – that’s 24% more than last year and way better than Wall Street expected. Their earnings per share hit $8.88, crushing estimates. But here’s the kicker: this growth is actually coming from their bread-and-butter business getting supercharged by AI, not some pie-in-the-sky virtual reality dream.
Their core apps (Facebook, Instagram, WhatsApp, and Messenger) generated $58.9 billion, with AI doing the heavy lifting. The company’s AI tools boosted engagement by 7% and made their ads way more effective. Turns out, when you use AI to show people ads they actually want to see, everyone wins – except maybe your wallet.
Reality Labs: Still a Beautiful Disaster
Let’s be real – Reality Labs is still hemorrhaging money like a broken ATM. They lost another $6 billion this quarter, bringing their total losses since 2020 to nearly $80 billion. That’s enough money to buy Twitter… twice.
But here’s where it gets interesting: Zuckerberg says these losses should peak in 2026 and then start declining. They’re also pivoting away from clunky VR headsets toward smart glasses, which actually tripled in sales last year. Maybe there’s hope yet.
Going All-In on AI (Again)
Now for the plot twist: Meta is doubling down on AI spending in a way that makes their metaverse splurge look like pocket change. They’re planning to spend $115-135 billion in 2026 alone on AI infrastructure. That’s not a typo – billion with a ‘B.’
The difference this time? They’re building on a foundation that actually makes money. Their ad business is growing 21% year-over-year, outpacing Google (13%) and Amazon (11%). Plus, they’re sitting on $81.6 billion in cash, so they can afford to take big swings.
The Bottom Line
Meta’s stock jumped 10% after these earnings, and honestly, it makes sense. This time around, they’re not asking us to believe in some distant virtual future – they’re using AI to make their existing money-printing machine work even better.
Sure, there are risks. Regulators are still breathing down their necks, and spending $135 billion on anything is inherently risky. But at least this time, they’re betting on technology that’s already showing results, not asking us to strap on headsets and pretend we’re in Ready Player One.
For investors who can stomach the volatility, Meta might finally be making the right kind of expensive bet.