In a strong start to the Big Tech earnings season, Meta Platforms reported impressive financial results, surpassing both revenue and profit expectations. The company disclosed a remarkable 24% increase in revenue for the quarter, reaching $59.9 billion, and noted its full-year revenue exceeding $200 billion, reflecting a 22% year-over-year rise. Despite previous uncertainty about the sustainability of the AI boom, Meta’s results indicate that the momentum is still very much alive.
However, the most significant takeaway for investors, particularly those focused on artificial intelligence, was Meta’s ambitious capital expenditure guidance for 2026. The tech giant announced that it anticipates capital expenditures will climb to between $115 billion and $135 billion, driven primarily by investments in its Meta Superintelligence Labs—essentially its AI initiatives—and enhancements to its core business functions, including its suite of applications and advertising services. This forecast marks a staggering increase of 73% from the previous year’s expenditures, which had already seen an 84% increase the year before. Meta’s infrastructure spending is projected to triple over just two years, further signaling a robust future for AI investments.
This substantial investment plan is anticipated to benefit various segments of the AI sector. Notably, CoreWeave, a rapidly expanding neocloud company that has formed partnerships with AI industry leaders such as Nvidia and OpenAI, stands to gain significantly. CoreWeave specializes in building data centers equipped with GPUs and other AI technologies, renting out essential computing power to hyperscalers and AI start-ups.
Last September, Meta and CoreWeave entered into a significant $14 billion agreement, with Meta committing to this amount for cloud computing capacity through 2031. A portion of Meta’s ambitious capex this year is expected to flow towards CoreWeave, although no specific partnerships were mentioned during the earnings call.
CoreWeave has had a tumultuous journey since going public less than a year ago. It began its trading life with a less-than-stellar IPO, listing shares at $40, which was below its anticipated range. The stock eventually soared to over $180 by June before witnessing a decline to below $70 last December. Despite this volatility, CoreWeave’s share price seems to respond to the overall sentiment of the AI market, reflecting its high-risk, high-reward business model.
As the company continues to make substantial investments in GPUs—largely funded through debt—their revenue is experiencing rapid growth, with projections indicating that this trajectory will persist through 2026. While CoreWeave’s share price did not react immediately to Meta’s capex announcement, the company is well-positioned to benefit should the AI race continue to escalate.
Meta’s forthcoming investment predictions bode well for overall AI spending across the hyperscaler sector. As other tech giants like Microsoft, Alphabet, and Amazon report their own capex expectations, there is speculation that positive outcomes could further enhance CoreWeave’s prospects in the burgeoning field of AI.
