Meta (META) is set to report its fiscal fourth quarter earnings after the bell on Wednesday, and Wall Street will be paying close attention to the company’s continued spending on AI data centers.
Meta’s stock price is down more than 12% since it reported its third quarter earnings in October, with investors raising concerns about the social media giant’s massive capital outlay.
Not only did Meta increase its projected capital expenditures for 2025 from between $66 billion and $72 billion to between $70 billion and $72 billion, it also says it expects 2026 capital expenditure growth to be “notably larger.”
In Q4, the company is expected to spend $21.9 billion, up from $14.4 billion in the same quarter last year. Meta is expected to report earnings per share (EPS) of $8.16 on revenue of $58.4 billion, according to Bloomberg analyst consensus estimates. That would be an improvement on the $8.02 per share and $48.4 billion the company saw in Q4 2024.
Meta’s Reality Labs division is expected to bring in $959 million in the quarter, but it’s expected to report an operating loss of $5.9 billion.
Meta isn’t alone in pouring billions into AI data centers. Advertising and AI rivals Amazon (AMZN), Google (GOOG, GOOGL), and Microsoft (MSFT) are also dumping enormous sums into their own data centers.
Meta has also spent lavishly on splash AI hires, including by spending $14.3 billion to purchase 49% of Scale AI and hire its CEO Alexandr Wang to serve as Meta’s chief AI officer and run its Superintelligence Labs.
But Meta has also run into some trouble with its newest AI models, including long delays to its Llama 4 Behemoth.
According to CNBC, the company is also considering making its next major AI model proprietary, moving away from the open-weights strategy that allows third-party developers to access Meta’s models, improving them over time.
The company also recently cut jobs in its metaverse division, with plans to use some of the savings on its wearables initiatives including its AI smart glasses.
The various maneuvers have created a sense that Meta is scrambling to keep up in the AI race, despite starting 2025 as a strong leader in the space. Google, with its Gemini 3 model, is now in the pole position, outpacing even ChatGPT developer OpenAI.
That’s helped goose Google’s share price, which is up 66% over the last 12 months. Meta’s stock is up just 4%, while Amazon is up a mere 1.8%.
Meta is also contending with increasing calls for social media bans for children under 16. Australia has already enacted its own ban, and France is considering similar action.
In the US, the Federal Trade Commission (FTC) announced on last week that it is appealing its loss in its antitrust case against Meta, which alleged that the company purchased Instagram and WhatsApp because it saw them as rivals that would hurt its leadership role in the personal social networking services market.
