META Stock Today: January 29 +10% on Q4 Beat, $115-$135B AI Capex
Meta stock surged about 10% after Q4 results topped estimates and Q1 revenue guidance beat forecasts. Shares of META rallied as management outlined 2026 AI capex of $115-$135 billion, almost double 2025. This scale aims to secure model training capacity and data centre leadership. For UK investors, the message is clear. Strong near-term trends meet heavy investment. We break down the drivers, the cash flow trade-off, the meta share price setup, and what it could mean for portfolios in Britain.
What drove the 10% move
Meta stock jumped after revenue and profit beat expectations and management guided Q1 sales above consensus. That signalled healthy ad demand and improving monetisation across Facebook, Instagram, and Reels. Investors rewarded the visibility, even as spend plans rose. Coverage highlighted the better-than-feared guide and momentum in core ads, which outweighed near-term cost concerns source.
For UK investors, the jump can lift US-heavy global funds and large tech ETFs. Direct holders of US shares on UK platforms saw immediate gains, but must still weigh currency moves versus the pound. The print reduces near-term earnings risk, yet higher AI spend means cash flow could dip in 2026. Think in multi-year terms, not days, when sizing exposure to meta stock.
AI capex guidance: $115-$135B in 2026
Management flagged 2026 AI capex of $115-$135 billion, nearly twice 2025, focused on data centres, custom chips, and training capacity for large models. The plan aims to protect product leadership across ranking, ads, and generative tools. Markets welcomed the demand signal, but questioned timing and magnitude. Reports noted investors accepted higher spend as long as revenue growth stays firm source.
The guidance implies lower free cash flow near term. On trailing figures, operating cash flow per share is 42.74, with capex running about 58% of operating cash flow and a price to free cash flow near 37.8. Net margin sits around 30.9%. If spend accelerates, 2026 margins may compress. The key debate is whether AI-driven ad and product gains offset the heavier investment by late 2026.
Valuation, sentiment, and the meta share price
Even after the rally, valuation rests on execution. The trailing price to earnings is about 28.9 and price to sales near 8.9, supported by roughly 21.9% revenue growth and strong margin recovery. EPS growth topped 62% for 2024. Street sentiment is constructive, with 51 Buy ratings, 4 Hold, and no Sells in our data. That leaves upside if AI returns land, but little room for big slip-ups.
Short-term technicals are mixed. RSI sits near 49, which is neutral. ADX around 28 suggests a firm trend, while the MACD histogram is negative. Bollinger Bands cluster near recent levels, flagging a possible squeeze. Average true range shows brisk daily swings. For traders, the meta share price could chop before a new trend. For investors, volatility can offer staggered entry points.
How UK investors can position
Treat the 2026 AI spend as a bridge to future growth. If you believe AI will raise ad yield and unlock new tools across Instagram and WhatsApp, hold a multi-year view. Consider phased buys to handle volatility and manage USD exposure if you report in GBP. Keep single-stock risk in check so one earnings miss does not derail your plan for meta stock.
Key catalysts include updates on ad demand, AI model performance, and product rollouts that monetise features inside Facebook, Instagram, and WhatsApp. Watch regulatory headlines, competitive moves in AI, and the pace of data centre builds. Risks are execution slippage, higher unit costs for compute, and weaker macro ads. Track the relationship between spend, revenue growth, and free cash flow.
Final Thoughts
Meta stock rallied as a clean Q4 beat and better Q1 guide met a clear AI vision. The 2026 capex of $115-$135 billion is huge, and it will pressure free cash flow for a period. The prize is higher ad efficiency, faster product cycles, and fresh monetisation across Reels and messaging. For UK investors, the trade-off is time. If AI returns scale in 2026 and beyond, today’s costs can make sense. Build positions in phases, mind USD exposure, and focus on the link between spend and revenue. Keep watching demand trends, AI milestones, and cash flow. Let the numbers confirm the thesis before adding size.
FAQs
Why did meta stock jump about 10% today?
Meta stock rose after the company beat Q4 expectations and guided Q1 revenue above forecasts. The market read this as resilient ad demand and improving monetisation across key apps. Investors looked past higher AI spending because the outlook showed momentum. Stronger visibility on near-term growth outweighed concerns about 2026 capex in the first reaction to the report.
What is Meta’s AI capex guidance and why does it matter?
Management guided 2026 AI capex to $115-$135 billion, nearly double 2025. Spending targets data centres, custom silicon, and training capacity for large models. It matters because it may compress free cash flow near term, but could lift ad efficiency, product innovation, and monetisation later. The debate is timing. If revenue follow-through arrives by 2026-2027, the investment can support higher long-term value.
Is meta stock expensive after the move?
On our figures, the trailing price to earnings is about 28.9 and price to sales near 8.9, backed by around 21.9% revenue growth and a near 30.9% net margin. That is not cheap, but it is supported by faster EPS growth and strong returns. Upside depends on AI execution and ad demand. If capex pays off, multiples can hold or expand. If not, they may compress.
How should UK investors approach meta stock now?
Use a multi-year view. Consider phased buys to manage volatility and size positions so a single quarter does not dominate portfolio risk. Be mindful of USD exposure and potential FX swings versus sterling. Track three things each quarter: revenue growth, capex pace, and free cash flow. If AI gains show in monetisation and margins, adding on dips can make sense.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
