• Meta Platforms (NasdaqGS:META) is planning one of the largest capital spending programs in tech, with up to $135b in 2026 focused on AI infrastructure.
• The company is pivoting resources from virtual reality and Metaverse projects toward AI products such as smart glasses and standalone AI video platforms.
• Recent actions include layoffs in the Reality Labs division and heavier marketing around its AI wearables portfolio.

Meta Platforms, trading at $661.46, is reorienting its business around AI at a time when its 3 year share return is up 282.5% and its 5 year return is up 146.2%. More recently, the stock is roughly flat year to date, with a 1.7% gain, and has seen a 7.1% decline over the past year. These performance figures may influence how investors view such a significant increase in AI infrastructure spending.

For investors, the scale of Meta’s planned AI spending and the shift away from some Metaverse projects raise questions about future product mix, competitive position in advertising, and long term profitability. Upcoming results and product developments will help clarify whether this intense AI focus affects Meta’s role in consumer technology and digital advertising, as well as the extent of any execution and cost risks that the market may reassess over time.

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How Meta Platforms stacks up against its biggest competitors

Meta’s plan to lift 2026 capex to as much as US$135b, paired with AI-centric products like smart glasses and an AI video app, points to a business that is trying to turn its core ad platform into an AI-first ecosystem. The latest numbers show Q4 2025 sales of US$59.9b and full year sales of US$201.0b, while net income for 2025 was slightly below 2024. The question for you as an investor is whether this very large AI and data center build can eventually translate that revenue base into stronger earnings power rather than prolonged margin pressure.

How This Fits The Meta Platforms Narrative

This capex surge and pivot within Reality Labs from pure VR to AI-powered wearables tie directly into the existing narrative that Meta wants to move beyond a single ad-supported social media model toward a broader mix of AR glasses, messaging commerce and AI tools. Previous theses around AI lifting ad performance and Reality Labs eventually contributing more meaningful revenue now hinge on management turning these AI-heavy investments into products that keep users engaged across Facebook, Instagram, WhatsApp and newer offerings like Threads and Vibes.

Risks and Rewards Investors Should Weigh

• ⚠️ Very large AI infrastructure spending, including multi year data center build outs, could keep depreciation and operating costs high if monetization from new products is slower than hoped.
• ⚠️ Reality Labs is expected to continue large losses, and shifting focus from VR to AI wearables adds execution risk versus competitors like Apple and Snap in headsets and glasses.
• 🎁 Management guidance that 2026 operating income will exceed 2025, together with Q4 revenue of US$59.9b, indicates Meta is trying to balance heavy AI spend with profitability discipline.
• 🎁 Meta’s AI push in advertising, where peers like Alphabet and Amazon are also investing heavily, could support stronger ad performance if its recommendation and targeting tools keep attracting marketer budgets.

What To Watch Next

From here, key things to track are how quickly Meta ties this AI capex to visible business outcomes, such as ad tools adoption, smart glasses usage and any traction from new AI video platforms, especially compared with Alphabet and Microsoft. If you want to see how different theses connect these moves to long term growth, risks and valuation debates, take a look at the latest community views on Meta’s story by checking the community narratives for Meta Platforms.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
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Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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