Meta Platforms is charting a bold financial course for 2026, committing unprecedented capital to artificial intelligence infrastructure while simultaneously expanding its consumer hardware ecosystem. This aggressive investment strategy unfolds against a backdrop of continued robust advertising revenue and persistent losses in its Reality Labs division, presenting a complex picture for investors.
Financial Engine: Advertising Strength Fuels Ambitious Capex
The company’s core advertising business provides the substantial capital required for its ambitious plans. In the fourth quarter, Meta reported revenue of $59.89 billion, a significant 24% year-over-year increase. For the full year, revenue reached $200.97 billion. Quarterly earnings per share came in at $8.88, driven by an 18% rise in ad impressions and a 6% increase in the average price per ad.
This financial strength is being channeled into a dramatic ramp-up in capital expenditures. The company has raised its 2026 Capex forecast to a range of $115 to $135 billion, a substantial jump from the $72.2 billion planned for 2025. Total expenses for 2026 are projected to be between $162 and $169 billion. The primary focus of this spending is a massive scaling of AI computational capacity.
Building the AI Foundation: A Partnership-Driven Approach
To achieve its AI ambitions at speed and scale, Meta is leveraging deep industry partnerships. A cornerstone of this strategy is a multi-year alliance with Nvidia. The company plans to deploy millions of Nvidia’s next-generation Blackwell and Rubin GPUs, alongside Grace CPUs and networking components, within its hyperscale data centers. CEO Mark Zuckerberg has indicated that the upcoming Vera Rubin data center chips are intended to power the platform for “personal superintelligence.”
Meta is also diversifying its infrastructure sourcing. This includes a previously awarded $3 billion contract to the Nebius Group, a specialized infrastructure provider.
Wearables Expansion: Introducing “Malibu 2”
Parallel to its backend infrastructure build-out, Meta is advancing its consumer-facing hardware strategy. Reports indicate the company plans to release a new smartwatch, codenamed “Malibu 2,” later this year. The device is expected to feature advanced health-tracking capabilities and integrate seamlessly with a built-in Meta AI assistant.
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This move represents more than a simple product launch; it is a strategic effort to broaden Meta’s ecosystem and create new distribution channels for its AI services. The smartwatch would become another product category under the Reality Labs division, which focuses on consumer hardware and augmented reality applications.
The Reality Labs Conundrum: Persistent Losses Amid Growth
The performance of Reality Labs continues to contrast sharply with the company’s advertising success. The division’s quarterly revenue declined by 12% to $955 million, while its operating loss amounted to $6 billion. Company management has projected that losses in this segment will peak this year.
Recent insider transactions have also captured market attention. Chief Technology Officer Andrew Bosworth sold 8,089 shares on February 18, 2026, for approximately $5.1 million. Chief Financial Officer Susan J. Li previously sold 6,418 shares for about $4.1 million.
Analysts are adjusting their models to account for the heightened expenditure outlook. For instance, Erste Group Bank has set its 2026 EPS estimate at $29.58.
In recent trading, Meta’s shares have shown limited movement. The stock currently trades at 541.60 Euros (showing a slight gain). However, on a 12-month basis, the share price reflects a decline of approximately 15%. This market performance encapsulates the narrative of a company delivering strong operational results while directing extraordinary resources toward future growth in AI and new hardware categories.
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