Nvidia Chief Executive Jensen Huang has identified Meta Platforms as a frontrunner in generating profits from artificial intelligence, telling CNBC that the company stands out for its effective use of the technology. This endorsement comes as major tech firms face investor scrutiny over soaring capital expenditures dedicated to AI infrastructure.
Massive Spending Outlook
Meta has forecast its capital expenditures for 2026 to range between $115 billion and $135 billion, primarily targeting data centers and other high-cost infrastructure. This substantial investment plan coincides with strong financial results: fourth-quarter revenue increased 24% year-over-year to $59.9 billion, with earnings per share reaching $8.88. CEO Mark Zuckerberg pointed to robust business performance throughout 2025.
AI-Driven Ad Gains
The company attributed recent advertising improvements directly to AI advancements. Upgrades to its ad ranking models drove a 3.5% increase in Facebook ad clicks and a more than 1% rise in Instagram conversions during the fourth quarter. Meta also reported that its AI-powered video generation tools have achieved a $10 billion annual revenue run-rate.
Despite the revenue growth, Meta's operating margin has contracted to 41%, down from 48% the previous year. The company cautioned that rising legal and regulatory challenges in the U.S. and European Union could significantly impact its performance. Analysts note that if advertising budgets tighten during an economic downturn, the debate over the return on massive AI investments will intensify.
The scale of industry spending is colossal. According to reports, leading technology companies are preparing to invest approximately $660 billion into AI by 2026, a sum significant enough to influence broader markets. As firms like Meta balance aggressive investment with profitability, their ability to monetize AI will remain a critical focus for investors.
