Meta’s AI Ambition: A High-Stakes Bet on the Future

All eyes are on Meta Platforms as it prepares to release its quarterly earnings after the US market close. While strong revenue growth for the last quarter is anticipated, investor focus has shifted sharply to the company's spending plans. A newly announced multi-billion dollar deal, revealed just hours before the figures, underscores a clear and costly strategy: the tech giant is placing a massive, high-risk wager on artificial intelligence.

The scale of Meta's investment became apparent immediately prior to its earnings release. The company has entered into a substantial agreement with specialty glassmaker Corning. Valued at up to $6 billion, this deal secures a supply of fiber optic cables, which are critical for expanding the data center infrastructure needed to power its AI ambitions.

This move highlights the company's significant strategic pivot toward generative AI. It is here, however, that investor concerns are concentrated: costs are skyrocketing. Analysts, including those from TD Cowen, caution that capital expenditures (Capex) could surpass the $100 billion mark by 2026 to fund this aggressive AI roadmap. Against this backdrop, Meta's stock, trading around $669 ahead of the report, appears nervous.

Core Business Strength Amid Strategic Shifts

Market participants expect robust fundamental performance for the fourth quarter of 2025. The consensus forecast points to revenue of approximately $58.59 billion, representing year-over-year growth of about 21 percent. Earnings per share are projected to be in a range between $8.16 and $8.23.

Should investors sell immediately? Or is it worth buying Meta?

Concurrently, the Reality Labs division, responsible for the Metaverse, continues to incur significant losses. Projections indicate an operating loss between $5.67 billion and $5.9 billion. Meta is already adjusting to this reality; reports suggest over 1,000 positions have been eliminated within this unit to reallocate resources toward AI product development and Smart Glasses initiatives.

Exploring New Revenue Streams

In an effort to reduce reliance on its advertising business and help fund substantial investments, Meta is testing new monetization avenues. Current information points to experiments with paid subscription models for Facebook, Instagram, and WhatsApp. These would grant users access to advanced AI features, such as the "Manus" AI agent or the "Vibes" video generator.

The decisive catalyst for the share price will likely emerge from today's conference call, scheduled for 4:30 PM ET. The primary focus will not be a retrospective look at the past quarter, but rather the specific expenditure forecast for 2026. Institutional investors are now demanding proof that the historic infrastructure investments will yield a tangible return, seeking a clear path to a demonstrable return on investment.