Why Did Meta Stock Rise 10% After Q4 Earnings?

Meta share price rocketed 10% the moment its Q4 earnings hit the tape. In a single session, the market added tens of billions of dollars in value to the company, reacting to a powerful mix of 24% revenue growth, a 50%+ jump in operating profit, and a guidance upgrade that few were positioned for.

For a stock that had spent much of the year caught between “mature ad business” fears and concerns around heavy AI spending, this quarter flipped the narrative. Investors suddenly saw something clearer: Meta’s core engine is throwing off more cash than expected, margins are expanding faster than peers, and AI is starting to show up where it matters most, monetisation.

Let’s break down with this blog why Meta share price surged after Q4 earnings, what exactly surprised the market, and how investors are now rethinking Meta’s growth story.

Meta Earnings Snapshot: The Numbers That Changed Sentiment

Meta Stock surged as much as 10% in after-hours trading on Wednesday, according to Google Finance data. The immediate catalyst was a broad-based earnings beat. But what really mattered was how much better Meta looked versus last year, not just versus estimates.

Meta Q4 Earnings At a Glance

Source: Meta Earnings Report, Meta Investor Relations

Meta’s Revenue growth was strong, but profitability exploded. A 700-basis-point jump in operating margins in a single year is rare at Meta’s scale, and it signalled that cost discipline and efficiency gains are finally compounding.

Meta Earnings Call Highlights: Advertising Is Still the Engine

One of the biggest pre-earnings concerns was whether advertising growth was slowing structurally. The Meta earnings call pushed back hard on that narrative. Management highlighted:

• Higher ad impressions driven by Instagram Reels and engagement
• Stable-to-improving pricing per ad
• Better conversion and targeting outcomes from AI-led ad tools

In short, advertisers are not just spending more, they are seeing better returns. That matters in a macro environment where marketing budgets are scrutinised line by line. This reassurance around ads removed a key overhang on Meta stock price, which had been sensitive to any sign of demand softness.

Why Meta’s Massive AI Capex Didn’t Scare Investors

Meta also announced one of the largest investment plans in its history: $115–$135 billion in capital expenditure for 2026, largely directed toward AI infrastructure. Normally, numbers like that would trigger fears around margin compression. This time, investors leaned in.

Why?

• Meta generated ~$14 billion in free cash flow in a single quarter
• AI is already improving ad efficiency and engagement
• Management framed AI as a revenue accelerator, not a long-dated bet

The market takeaway was clear: Meta can afford to spend aggressively and expand margins at the same time. That combination is powerful.

Why is Meta Stock Rising?

While the headline earnings grabbed attention, forward guidance by Meta Management quietly did the heavy lifting. Meta guided Q1 revenue to $53.5–$56.5 billion, comfortably ahead of consensus expectations. That implied:

• Advertising momentum is carrying into 2026
• Q4 strength was not a one-off
• AI-driven efficiency gains are sustainable

Markets usually don’t rally 10% on backward-looking results alone. They rally when forward assumptions change. This guidance forced analysts to lift revenue and earnings forecasts across future quarters.

Why the Market Repriced Meta Stock So Aggressively

Before earnings, Meta was largely viewed as a mature advertising tech platform with capped margins and uncertain long-term growth visibility. After the latest Meta Earnings Report, investors were looking at:

• 50%+ operating income growth
• Expanding margins at scale
• A credible AI reinvestment cycle funded by cash flows

That gap between perception and reality is why the reaction was sharp. The market wasn’t cheering good news. It was correcting a mispricing.

What This Means for Investors Watching Meta Stock

For investors tracking Meta stock price, this earnings print changes the framework:

• Meta is no longer just an ad-cycle trade
• AI is starting to show tangible ROI, not just cost
• Capital discipline has improved materially

However, there are still risks. Reality Labs continues to burn cash, and AI spending will remain elevated. But the Q4 results showed that Meta’s core business is strong enough to absorb those risks without breaking financial momentum.

Final Takeaway from Meta Earnings Report

Meta’s 10% surge after Q4 earnings was a rational response to strong year-on-year growth, margin expansion, and a forward outlook that reset expectations. The Meta earnings changed how the market thinks about Meta’s future. Of the 69 analysts tracked by INDmoney, 88% rate Meta as a 'Buy’ with an average target price $832.78, a 19.7% increase from current price.

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