What Happened?
Shares of social network operator Meta Platforms (NASDAQ: META) jumped 9.2% in the afternoon session after the company reported fourth-quarter 2025 earnings that surpassed Wall Street's expectations and provided a strong revenue forecast for the upcoming quarter.
Revenue for the quarter climbed 23.8% year over year to $59.89 billion, while earnings per share came in at $8.88, both beating analyst projections. This growth was supported by a 6.9% increase in daily active people across its family of apps. Looking ahead, Meta's revenue guidance for the first quarter of 2026 had a midpoint of $55 billion, comfortably ahead of analysts' expectations of $51.34 billion.
Management's guidance reflected strong expectations for further gains from AI investments, ongoing product rollouts, and infrastructure expansion. Zuckerberg stated that 2026 is expected to be a pivotal year for "personal superintelligence," with new AI models and agentic products set to launch across Meta's ecosystem. The impressive top-and-bottom-line beats, coupled with a robust outlook, signaled strong business momentum to investors.
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What Is The Market Telling Us
Meta’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 4.7% on the news that investor optimism grew following positive analyst commentary and the company's announcement that it would begin showing ads on its Threads platform. Jefferies analysts noted the stock traded at a discount compared to Alphabet and that the high costs of AI investment were likely already factored into the price. The firm also highlighted that Meta's AI-powered ad tools had surpassed a $60 billion annual revenue run rate. Adding to the positive news, Meta announced it would start a global rollout of ads on its Threads platform, which had grown to over 400 million monthly active users. The company’s new AI lab also delivered its first key models internally, which reportedly showed a lot of promise. This combination of new monetization avenues and progress in artificial intelligence appeared to boost investor confidence in the company's direction.
Meta is up 12.7% since the beginning of the year, and at $733.05 per share, it is trading close to its 52-week high of $790 from August 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $2,837.
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