Shares of Meta Platforms (META 2.43%) surged after the social media company reported strong Q4 results that easily surpassed analyst estimates and issued upbeat guidance. Going into its report, the stock was basically flat over the past year.
With the stock gaining some momentum, let's take a closer look at its report and guidance to see if Meta's stock is a buy.
NASDAQ: META
Key Data Points
Full speed ahead
Investors have been worried about Meta's capital expenditures (capex). However, the company did not back down, upping it to a range of $115 billion to $135 billion for 2026. That's a big jump from the already hefty $72.2 billion it spent in 2025. The funds will mostly be directed toward its artificial intelligence (AI) efforts. However, it did say that losses at its Reality Labs division will be similar to those in 2025 and should peak this year.
Image source: Getty Images.
Meanwhile, Meta's core business continues to hum along. Revenue for the quarter jumped 24% year over year to $59.9 billion, while adjusted EPS rose by 11% to $8.88. Analysts were expecting revenue of $58.6 billion and adjusted EPS of $8.23, as compiled by LSEG.
Advertising revenue also jumped 24%, coming in at $58.1 billion. Revenue at Reality Labs, which is home to Meta's metaverse and its augmented reality headsets and smart glasses, fell 12% year over year to $955 million. Operating income from its social media apps increased by 9% to $30.8 billion, while Reality Labs posted a loss of $6 billion versus $5 billion a year earlier.
Meta's advertising growth was driven by an 18% increase in ad impressions and a 6% rise in average price per ad. Meta also continues to grow its number of users. Family daily active people (DAP), a measurement of registered users who log in to one of Meta's apps daily, rose by 7% year over year to 3.58 billion.
Looking ahead, Meta guided for Q4 revenue to be between $53.5 billion and $56.5 billion, which equates to growth of between 26% to 34% year over year.
Is Meta Platforms' stock a buy?
Trading at a forward price-to-earnings (P/E) ratio of around 24 times 2026 analyst estimates, Meta is one of the cheapest megacap AI stocks. At the same time, its core advertising business is hitting on all cylinders, powered by its generative ads recommendation model (GEM) and sequence learning model architecture, which are helping drive both ad impressions and conversions. Meanwhile, it plans to expand ads on both WhatsApp and Threads, which are still in their early stages of ad monetization. This should be another growth driver.
Given its valuation and growth outlook, this is a stock to own for 2026, even after this jump in share price.
