Meta Platforms Inc (NASDAQ:META) stock rose 7.44% (As on January 29, 11:18:05 AM UTC-4, Source: Google Finance) after the company reported fourth-quarter earnings that topped estimates and issued stronger-than-expected sales guidance. The company said its advertising business generated revenue of $58.1 billion for the period. Advertising made up nearly 97% of the company’s overall revenue for the quarter. Meta said that fourth-quarter daily active people came in at 3.58 billion, in line with Wall Street estimates.

Moreover, the company spent a large chunk of 2025 overhauling it AI unit, investing $14.3 billion in Scale AI as part of an effort to land the startup’s founder Alexandr Wang and several of his colleagues. Wang oversees Meta’s top-tier TBD unit that is tasked with developing powerful AI models. The company set up TBD after its Llama 4 model launched to tepid response from developers last spring. Meta has been testing a new frontier model and Llama successor code-named Avocado, and plans to release it during the first half of the year, CNBC reported. The company’s Reality Labs unit logged an operating loss of $6.02 billion while generating $955 million in sales for the quarter. Analysts were projecting Reality Labs to record an operating loss of $5.67 billion on $940.8 million in fourth-quarter sales. Reality Labs now has nearly $80 billion in total operating losses since late 2020.

META in the fourth quarter of FY25 has reported the adjusted earnings per share of $8.88, beating the analysts’ estimates for the adjusted earnings per share of $8.23, according to analysts polled by LSEG. The company had reported the adjusted revenue growth of 24 percent to $59.89 billion in the fourth quarter of FY25, beating the analysts’ estimates for revenue of $58.59 billion.

Meta said it expects first-quarter sales to come in the range of $53.5 billion to $56.5 billion, ahead of analyst estimates of $51.41 billion. The social media giant said it expects the total expenses for 2026 to come in between $162 billion through $169 billion. Capital expenditures related to the company’s artificial intelligence push are expected to be in the range of $115 billion to $135 billion for 2026, ahead of analyst expectations of $110.7 billion for the year. It’s also nearly double how much Meta spent on capex in 2025, which came in at $72.2 billion. Meta said the capex spending is due to “year-over-year growth driven by increased investment to support the Meta Superintelligence Labs efforts and core business.”