Meta 4Q25 First Take: Results were mixed, but vs. expectations the upside surprise far outweighed the negatives. For a name that has been punished for a while, Meta deserved a small reward.

1) Solid quarter on the headline: Q4 fundamentals were firm. Ad strength was driven by Reels and AI—higher engagement, larger ad inventory, and better conversion; the industry backdrop also helped.From an expectations perspective—especially with increasingly bullish buy-side views over the past two days—Q4 itself was not the focus. Hence, guidance mattered more.

2) Big positive—blowout revenue guide: Management guides Q1 revenue growth of 26%-34% to $53.5-56.5bn, well above the market's ~21%.This implies healthy early traction in Threads monetization and continued momentum in Reels.

3) Small negative—spend still aggressive: Management guides FY26 Opex at $162-169bn (+37%-44% YoY), above buy-side at $150-160bn (slightly above BBG consensus).If not for the powerful top-line outlook, this would likely have been punished。

Meanwhile, FY26 Capex is $115-135bn (+59%-87% YoY).Buy-side at $120-130bn sits within the range—neither a negative nor a positive surprise.

Overall, the budget still grants ample room to invest. Whether it can be tightened later likely depends on revenue pressure, consistent with Meta's past behavior.Given the gap in frontier models/LLMs that Meta aims to close, AI spend is unlikely to see major cuts unless pressure rises; any optimization would most likely come from legacy units.

The blowout growth outlook can temporarily offset critiques about loose near-term spend discipline. Despite profit pressure over this year and next, the relatively low valuation is drawing flows betting on a narrative turn.Investors will watch the Q1 launches of models Avocado and Mango—whether they are 'very good' as the CTO suggested. They will also track Threads monetization and any future signals of Opex optimization. $Meta Platforms(META.US)