Meta Platforms (META) saw its stock price surge approximately 8% in after-hours trading on January 30, following a strong fourth-quarter performance that exceeded analysts’ expectations and a positive revenue forecast for the first quarter. The tech giant reported record profitability and indicated robust demand in its advertising segment, while also unveiling an ambitious artificial intelligence capital expenditure plan estimated between $115 billion and $135 billion for 2026. This significant investment aims to enhance data center capabilities and improve AI model training processes, raising questions among investors, particularly in Japan, about how increased spending will impact budgets in the tech sector through 2026.
The strong quarterly results prompted a flurry of optimistic reactions from investors, who noted the resilience of advertiser budgets, improved monetization strategies, and effective cost management by the company. Management’s guidance suggests that this positive momentum could extend into early 2026, as the market begins to price in Meta’s earnings potential. While bulls confidently argue that the company’s profit cycle has room to grow, bears caution that the increasing capital expenditures could place pressure on free cash flow.
Meta’s management has framed its 2026 AI capital expenditures as a significant step forward, with spending expected to rise as much as 90% compared to previous estimates. This is particularly noteworthy in the context of the Japanese market, where such an investment translates to up to ¥20 trillion, highlighting Meta’s intent for a long-term multi-year expansion of its computing and infrastructure capabilities. Investors will be closely monitoring how effectively this capital is deployed to drive future growth, given that near-term free cash flow may take a hit from these investments.
This level of capital expenditure has the potential to enhance operational capacity and improve latency, ultimately boosting AI product performance over time. Investors are keen on watching metrics such as unit costs per inference and training throughput, which serve as proxies for the expected returns on this substantial investment. The market’s reaction to updates regarding data center timelines, advancements in custom silicon, and the rollout of AI features will be critical to Meta’s stock trajectory.
For investors based in Japan, currency fluctuations add another layer of complexity. A weaker yen could enhance returns from dollar-denominated assets, while a stronger yen risks diminishing those gains. As such, investors may need to consider strategies for hedging their USD exposure. The dynamic nature of Meta’s stock price, especially during after-hours trading sessions, necessitates careful order placements around U.S. market openings, particularly during earnings releases and updates on AI capex.
In terms of financial metrics, Meta’s recent performance shows an earnings per share (EPS) of 23.47 and a price-to-earnings (P/E) ratio of about 31, with a dividend yield hovering around 0.28%. Return on equity sits at roughly 30.6%, while the free cash flow yield is around 2.48%. These figures suggest a company exhibiting strong growth at a premium valuation, though investors are acutely aware of the risks associated with heavy capital expenditures. The stock’s performance will hinge on whether revenue growth and operational efficiency can counterbalance the pressures from increased capital spending.
The technical indicators currently show a relative strength index (RSI) of 49, suggesting neutral momentum, while the average directional index (ADX) of 28 indicates a strong trend. Bollinger Bands are positioned between 642.73 and 670.68, with a mid-point at 656.71, while Keltner Channels center around 654.76. The MACD histogram remains negative, indicating caution among traders. A breakout above the upper bands may require confirmation through follow-through volume, while any retreats towards the mid-bands could test market conviction.
Analysts maintain a positive outlook on Meta, with a consensus rating of 67 Buys, 6 Holds, and no Sells. Projections estimate a monthly price target of $680.73 and an annual outlook near $707.99. The company’s next earnings date is set for April 29, 2026, with anticipated catalysts including updates on AI features, advertising demand trajectories, and further clarity on the phasing and returns of the 2026 capital expenditure plan.
The interplay of earnings momentum and heightened guidance presents a compelling narrative for Meta’s stock. However, the substantial AI capex plan introduces uncertainties regarding cash flow timing. For investors, especially those based in Japan, the focus should remain on tracking execution metrics that would signal efficient capital deployment translating into enhanced product innovation and monetization. As earnings approaches on April 29, 2026, attentive monitoring of infrastructure development and AI-driven revenue will be vital. If Meta can sustain its margins while scaling capacity, it may solidify its leadership position in the tech sector through 2026.
As a final note, understanding the implications of this capital investment, alongside ongoing market dynamics, will be crucial for stakeholders seeking to navigate Meta’s evolving landscape.
FAQs
Why did Meta stock price jump after hours?
The company beat Q4 expectations and guided Q1 revenue above consensus, signaling healthy ad demand. Management also detailed a clear AI roadmap. The combination of record profits, confidence on near-term growth, and a plan to scale infrastructure lifted sentiment. Traders bid shares up about 8% in after-hours, according to Japanese market coverage.
How big is Meta’s 2026 AI capex in yen?
Management outlined $115–$135 billion for 2026. Japanese media framed this as up to about ¥20 trillion and as much as a 90% increase versus earlier thinking. The figure reflects data center expansion, compute, and model training investments that aim to power future AI products and advertising performance at scale.
Is Meta stock price expensive now?
Recent metrics show a P/E near 31, EPS of 23.47, dividend yield around 0.28%, and strong ROE near 30.6%. That is a premium to the market, which investors may accept if revenue growth, AI-driven engagement, and operating leverage stay strong. The main risk is near-term free cash flow pressure from heavy capex.
What should Japan investors watch next?
Focus on April 29, 2026 earnings for capex phasing, AI feature updates, and ad demand. Track margins, free cash flow, and commentary on data center timing. Consider FX exposure on USD assets, and use limit orders around volatile periods. Meta stock price may react quickly to any changes in guidance or AI execution milestones.
See also
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Singapore’s ESR Strategy: Boosting Global Competitiveness and AI Leadership in Turbulent Times
Dr. Matthew Meyer Explores AI’s Impact on Humanity at UW-Eau Claire Seminar on Feb. 5
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