Meta’s Q4 2025 earnings call with investors on Wednesday was brought to you by the letters “A” and “I.”
And also by the numbers $115 billion and $135 billion. That’s the range for Meta’s planned 2026 capital expenditures – including major AI investments.
In other words, Meta is using the cash from its ads business to build a massive compute machine aimed at powering its “personal superintelligence” ambitions.
“We’re starting to see the promise of AI that understands our personal context, including our history, our interests, our content and our relationships,” CEO Mark Zuckerberg told investors. “A lot of what makes agents valuable is the unique context that they can see, and we believe that Meta will be able to provide a uniquely personal experience.”
For example, Zuckerberg alluded to a not-so-distant future in which most people will be wearing AI glasses that help them navigate their day and generate personalized information directly in their field of vision on the fly.
Ad dollars, AI dreams
But this isn’t just sci-fi product fantasy. It’s also part of Meta’s ad tech strategy.
The same AI infrastructure that Meta is building for personal superintelligence is also training the models it uses to decide which ads to show, how often to show them and how to optimize for what’s most likely to drive clicks and conversions.
And if investors are overly worried about Meta’s AI splurge, they didn’t show it. The company’s stock ticked up just over 8% in after-hours trading.
Meta posted $201 billion in overall revenue last year, a 22% increase, with total ad revenue for 2025 clocking in at just over $196 billion. Zuckerberg readily acknowledged that advertising remains the beating heart of Meta’s business.
“For the next couple of years, ads are going to be by far the most important driver of growth in our business,” he said, adding that this is why Meta is pairing its new AI bets with heavy investment in boosting the performance of its core ad-supported apps.
A load off
Where Meta’s AI strategy is most palpable today is in the improvements it’s making to its ads and recommendation algorithms, including GEM (for ad ranking), Andromeda (for ads retrieval) and Lattice (for predicting and improving ad performance across its various systems).
Watch time for Instagram Reels was up more than 30% year over year. Meanwhile, ranking changes drove a 7% lift in views of organic feed and video posts on Facebook, which, according to CFO Susan Li, resulted in “the largest quarterly impact from Facebook product launches in the past two years.”
“There are two primary factors that drive our revenue performance,” Li said, “our ability to deliver engaging experiences for our community and our effectiveness at monetizing that engagement over time.”
Li framed the strategy as more about enhancing monetization efficiency rather than just cranking up the ad load and stuffing more ads into people’s feeds.
For example, Meta has been “tuning” its systems to identify the right time and place to deliver ads, she said, which, in some cases, allows it to grow the overall ad load without disrupting the user experience.
But “an increasingly important part of this work,” Li said, “is finding opportunities to drive incremental conversions within the same overall level of ad load by determining when a person is more interested in seeing an ad.”
During the second half of 2025, she said, Meta’s initiatives to redistribute ads across users and sessions on Facebook led to a nearly four times larger revenue impact than increasing ad load on Facebook.
In Q4, the total number of ad impressions across Meta’s services increased 18% year over year, while the average price per ad rose 6%, Li said, mainly thanks to improved ad performance and advertiser demand.
“And we see a lot of headroom to improve recommendations in 2026,” she said.
