SAN FRANCISCO, United States — Meta, the parent company of Facebook and Instagram, saw its shares jump more than 8 percent in after-market trades on Wednesday after reporting quarterly financial results that significantly exceeded market expectations.
The social media giant attributed its strong performance to a combination of robust advertising revenue and the early results of its massive pivot toward Artificial Intelligence (AI).
Financial Performance Breakdown
- Net Profit: Meta earned a profit of $22.8 billion in the recently ended quarter.
- Revenue: Total revenue reached nearly $60 billion, with the company projecting as much as $56.5 billion for the current quarter.
- User Base: Approximately 3.58 billion people used a Meta-owned app daily during the quarter.
- Capital Expenses: Meta spent $22.14 billion on infrastructure, including the data centers required to power its AI ambitions.
The “Superintelligence” Strategy CEO Mark Zuckerberg expressed confidence in the company’s “all-in” approach to AI:
- Future Spend: Meta expects to spend more than $100 billion this fiscal year, primarily driven by Meta Superintelligence Labs.
- Personal Superintelligence: “I’m looking forward to advancing personal super intelligence for people around the world in 2026,” Zuckerberg said during the earnings call.
- Smart Glasses: Zuckerberg reiterated his belief that AI-infused smart glasses—developed in partnership with Ray-Ban—will eventually replace the smartphone as the next major computing platform.
Legal and Regulatory Headwinds Despite the financial success, Meta is navigating significant legal challenges that could impact its future bottom line:
- Social Media Addiction Trial: A landmark “bellwether” trial has begun in Los Angeles, where Meta and YouTube are accused of designing their platforms to be addictive to young users, leading to severe mental health issues.
- Financial Risk: CFO Susan Li warned that youth-related legal issues and regulatory scrutiny in Europe and the U.S. “may ultimately result in a material loss.”
- Section 230 Defense: While social media firms have traditionally been shielded by Section 230 from liability for user-posted content, this trial focuses on the design of the business models themselves.
Analyst Perspectives Analysts noted that while investors are currently rewarding Meta’s growth, the “aggressive investment plans” may eventually lead to a cooldown as shareholders absorb the high costs. However, Meta is now recognized as owning one of the largest AI compute clusters in the world, positioning it as a primary rival to cloud giants like Google and Microsoft.
As the tech sector moves deeper into 2026, Meta’s ability to balance its high-cost AI research with the legal realities of social media regulation will be the key narrative for its $1-trillion valuation.