Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately. The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere. The company was formerly known as Facebook, Inc. and changed its name to Meta Platforms, Inc. in October 2021. The company was incorporated in 2004 and is headquartered in Menlo Park, California

Meta Platforms, Inc.

Key Points
Nvidia's new $2 billion investment in CoreWeave adds to its existing stake.
It helps funnel GPU demand to Nvidia, and protects its market share.
It's a wise strategy, even if it's not a game changer for Nvidia.
Nvidia (NASDAQ: NVDA) is a key cog in the ongoing data center investment cycle. Most AI hyperscalers use Nvidia's GPUs to train and run artificial intelligence (AI) in massive data centers.
Recently, the company announced a new $2 billion investment in CoreWeave, which specializes in building AI factories, specialized data centers. It then rents that computing capacity to AI companies, including OpenAI, Meta Platforms, and others.
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What could this new investment mean for Nvidia stock?
It gives Nvidia direct exposure to CoreWeave's growth and strengthens its partnership with the company
Nvidia's investment adds to its approximate 6.6% stake in CoreWeave. CoreWeave's data centers are designed and built specifically for AI. It's like a shortcut for AI hyperscalers, who can access computing resources more quickly by renting from CoreWeave than building their own data centers from the ground up.
Since CoreWeave's data centers use Nvidia GPUs, any business the company does with AI hyperscalers also means it is doing business with Nvidia. In other words, it helps protect Nvidia's AI market share.
The ongoing data center boom feels like a technological arms race. The immense investment is driving remarkable growth for CoreWeave. Analysts estimate that CoreWeave's revenue will skyrocket from $4.3 billion over the past 12 months to $12.0 billion this fiscal year and $19.5 billion the following year.
Setting the stage for Nvidia's Rubin launch
Another layer to this is Nvidia's upcoming Rubin chip. CoreWeave prides itself on its data center engineering, which it builds with future hardware in mind. Nvidia recently entered full production for the Rubin AI chip architecture, and as CoreWeave grows, it could help Nvidia launch Rubin and future chips more effectively.
It could still be extremely early in what appears to be a generational investment boom. AI is still becoming more intelligent, and real-world adoption is only just beginning. These two trends both translate to more energy and chips to make it all work.
That's why experts believe global data center spending could reach the trillions of dollars over the coming years. As explosive as the AI era has been, it could still be in its early innings. The U.S. government only recently launched the Genesis Mission to build out its AI.
Is the CoreWeave investment a game changer for Nvidia?
All of that said, it's a stretch to call this a game changer for Nvidia. CoreWeave and Nvidia's stake in the company are both relatively tiny compared to Nvidia as a whole. Nvidia's core business is still selling its GPU chips directly to the hyperscalers who have gone to CoreWeave for some capacity, but are still pouring billions of dollars into their own data centers.
Investors should applaud Nvidia for proactively making moves, game changing or not, to maintain its position as the leader in AI GPU chips. It should help Nvidia continue to grow throughout 2026 and beyond.
Should you buy stock in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $456,457!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,174,057!*
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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This Company Just Made a Big Move. Here's What It Means for Investors.

Key Points
Meta Platforms' core social media business remains strong thanks to a deep ecosystem that drives significant ad sales.
The company's valuation looks reasonable compared to its similarly sized peers.
Many investors are worried that the artificial intelligence (AI) sector is in a bubble. Whether or not there is merit to these fears, if you're concerned about the prospect of a bursting bubble but still want to invest in the trend, one approach would be to buy AI stocks that appear relatively undervalued. One great company that fits that description is Meta Platforms (NASDAQ: META). Its stock has lagged the market over the past six months, but it remains a top pick for buy-and-hold investors.
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Meta Platforms' strong core business
Meta Platforms owns some of the most popular social media services, including Facebook, Instagram, Threads, and WhatsApp. Its ecosystem attracts about 3.5 billion daily active users. Unsurprisingly, its apps are popular among advertisers, and not just because of the sheer size of the company's user base. The volume of activity and engagement on the tech leader's platforms gives it access to plenty of data that helps enhance companies' ability to target potential customers.
The ability to track everything from the posts people like, the videos they watch, the celebrities they follow, and the discussions they engage in grants Meta Platforms a rich set of data to use toward that end. Further, the company has in recent years improved its ad platform through AI-powered algorithms that boost user engagement. More time spent on Meta Platforms' social media sites means higher ad demand, which in turn means more revenue and earnings, all other things being equal. Meta's AI offerings for marketers have also helped advertisers simplify their ad launches. These initiatives are having a meaningful impact on its financial results.
Why the stock is still a buy
The market, though, has become worried about the massive sums that Meta is spending to fund its AI ambitions. If the returns on those hundreds of billions of dollars in spending don't pan out as the company hopes, its margins and profits will be squeezed. It's a reasonable fear. However, it's worth noting that Meta Platforms seems to be trading at a more reasonable valuation than its fellow "Magnificent Seven" tech giants. Its forward price-to-earnings ratio is the lowest in this group (by a solid margin), even though its revenue growth and earnings growth have been competitive in recent quarters.
Could the company's ambitious AI plans fail to deliver results in line with management's expectations? Sure. But even if that happens, my view is that Meta Platforms could quickly cut its costs, pivot its strategy, and recover. That's precisely what it did after its expensive metaverse efforts failed to gain traction. The company altered its strategy and turned toward AI -- so far, successfully so. Meta Platforms' deep ecosystem and network effects -- which should help it retain most of its users -- position it for a host of new monetization opportunities. And that's a great reason to buy the stock -- especially at its current levels -- and hold it forever.
Should you buy stock in Meta Platforms right now?
Before you buy stock in Meta Platforms, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $461,527!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,155,666!*
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*Stock Advisor returns as of January 29, 2026.
Prosper Junior Bakiny has positions in Alphabet, Amazon, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

1 Beaten-Down AI Stock to Buy and Hold Forever

Corning Inc. GLW – a giant communication components manufacturer – reported strong fourth-quarter 2025 earnings results. Adjusted earnings per share (EPS) of $0.72 surpassed the Zacks Consensus Estimate of $0.70 and the year-ago EPS of $0.57. Quarterly revenues of $4.41 billion outpaced the Zacks Consensus Estimate by 2.1% and the year-ago revenues of $3.87 billion.
In the reported quarter, net sales of the core optical communications business climbed 24.3% year over year. Total operating margin increased 1.7% from the year-ago quarter to 20.2%. Free cash flow nearly doubled in 2025 to $1.72 billion from $880 million in 2024.
After benefiting the semiconductor industry immensely, the astonishing growth of the artificial intelligence (AI) technology globally is going to boost the communication components segment, especially the optical technology.
AI-powered data centers need very high speed and efficiency to deliver outputs. As a result, the demand for optical communication components is expected to skyrocket in the near future. Coring is all set to tap this growth trajectory.
Extensive AI-Focused Portfolio
GLW offers several products focused on data centers, with a portfolio consisting of optical fiber, hardware, cables and connectors, enabling it to create optical solutions to meet evolving customer needs. This augurs well for its long-term growth.
The growing adoption of innovative optical connectivity products for generative AI applications is expected to be a key growth driver for GLW in the upcoming quarters. Since both consumers and enterprises are using networks more extensively and the data thus generated is increasingly being used to train AI models, there is tremendous demand for quality networking.
Additionally, data consumption patterns are changing, with a growing propensity to consume video content, creating the need for faster data transfer. Since optical networks are more efficient and most existing networks are copper-based, the demand for GLW’s optical solutions is particularly strong.
Major Collaborations
Corning's fiber-optic products are in high demand from technology giants. The company is a technology partner of generative AI-focused semiconductor behemoth NVIDIA Corp. NVDA. GLW supports NVDA’s silicon photonics ecosystem-based AI infrastructure.
Recently, Meta Platforms Inc. META clinched a deal with GLW for a total consideration of $6 billion through 20230. Per the agreement, GLW will supply cabling, optical fiber, and other communication components to META’s data centers.
Strong Guidance
Corning projected that core sales would be in the range of $4.2-$4.3 billion in first-quarter 2026. Adjusted per-share earnings are expected between $0.66 and $0.70. GLW also raised its internal “Springboard” growth plan. The company is expected to generate $6.5 billion in incremental annualized sales by the end of 2026 and $11 billion by the end of 2028. The previous guidance was $6 billion and $8 billion for 2026 and 2028, respectively.
Solid Estimate Revisions
Corning has an expected revenue and earnings growth rate of 11% and 20.5%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 0.3% in the last seven days. The stock has a long-term (3-5 years) EPS growth rate of 18.8%, higher than the S&P 500’s growth rate of 16%.
Image Source: Zacks Investment Research
Investment Thesis
Corning currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The stock price has soared more than 100% in the past year. However, after the fourth-quarter results, it fell more than 5%. That was primarily due to the fact that the stock reached a 52-week high level the previous day on its META deal.
Image Source: Zacks Investment Research
GLW is set to capitalize on the AI boom with robust business execution and an industry-leading product portfolio. At this stage, each and every fall in the stock price will open a good entry point.
Image Source: Zacks Investment Research
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
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Buy Corning as a Potential AI Beneficiary in 2026 Amid Robust Outlook

What Investors Should Know About a Company's Workforce

Key Points
Apple stock is cooling off after a rapid run-up in the second half of last year.
A Gemini-powered Siri upgrade could come in February.
Apple shares are far from cheap.
Less than one month into the new year, Apple (NASDAQ: AAPL) is already down 8.8% year to date at the time of this writing, compared to a 1% gain in the S&P 500 (SNPINDEX: ^GSPC).
That makes Apple the second-worst-performing component of the Dow Jones Industrial Average.
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Here's what's driving the sell-off, and if the mega-cap tech stock is a buy now.
Context is key
Always take context into account when evaluating a stock's performance within a specific window, such as year to date or a year.
Apple sold off in the first half of 2025 due to tariff-related fears of eroding margins that never came true. The stock then gained 32.5% in the second half of the year. So heading into 2026, the company had added more than $1 trillion in market cap in a matter of months.
The stock is still up big over the last seven months, even when factoring in its pullback so far this year. It's up to investors to decide how much of the gain is warranted.
Apple is making a splash with AI
On Jan. 12, Alphabet and Apple published a joint statement announcing the integration of Google's Gemini models and cloud technology into the next generation of Apple Foundation Models. Reports indicate that a Gemini-powered version of Siri could come as soon as February.
Having a voice-controlled artificial intelligence (AI) assistant is a brilliant move on Apple's part. Manually-controlled AI functionality may be off-putting to some users, but narrating commands to an assistant could make AI more approachable for users who aren't tech savvy. It's also a good way for the company to gradually phase in AI rather than launching big, overwhelming upgrades.
Apple is known for taking its time with product launches, which is something long-term investors can appreciate. Instead, it aims to maximize the overall impact of a product or a product line's life cycle.
And that was certainly the case last year with the iPhone 17, which featured significant improvements in its camera, processing, and design but lacked the AI showstopper that some investors wanted.
Still, the iPhone 17 came out in September 2025, and investors cheered strong demand and a return to meaningful earnings growth, which Apple had been lacking for years.
Fundamentals are improving
As you can see in the following chart, Apple's earnings soared during the pandemic as consumers shifted purchasing from services to products, but then stagnated. Its recent results have given its earnings and operating margins a much-needed jolt.
Apple's product revenue grew 4.1% in fiscal 2025, and services revenue jumped 13.5%.
For the fiscal year, products raked in a highly impressive 36.8% gross margin, but services were even better at 75.4%. And with services now making up 26.2% of total sales, margins could continue to expand.
Overall, Apple's results have been solid. And that's without factoring in the growth potential of what is likely to be a big calendar year for the company with AI-powered software upgrades and an iPhone purpose-built for AI integration, which may also feature its first-ever foldable design.
Higher-end versions of the iPhone 18 are expected to be powered by Taiwan Semiconductor Manufacturing's 2-nanometer chips, which will make it by far the most expensive iPhone ever, but will also drastically improve processing and battery life.
Apple's valuation is elevated
With earnings growth and margins improving, the stock may become more appealing to growth investors. But its valuation is expensive, given that analyst estimates have the company growing earnings by only 10.3% in fiscal 2026 and 10.5% in fiscal 2027.
Even after its recent sell-off, Apple has a 30.9 forward price-to-earnings ratio (P/E) -- which is more expensive than Amazon, Alphabet, Microsoft, and Meta Platforms. Even Broadcom, which is growing at a breakneck pace and is also high-margin, has a 31.6 forward P/E. And Nvidia -- which converts over half of its revenue into after-tax net income and is also growing at a breakneck pace -- has a forward P/E under 40.
I would choose every stock in that chart over Apple because they all have strong competitive moats and more attractive valuations relative to their growth potential. Another distinct difference between Apple and other major tech stocks is its business model.
Apple is heavily dependent on consumer spending. In fiscal 2025, it demonstrated remarkable resilience in its core North American market, and strong growth in Europe and Asia (outside of China).
But China sales declined, and it remains to be seen if U.S. consumers will continue paying higher prices for Apple's AI-integrated devices, especially given that the cost of living continues to outpace wage growth. By comparison, big tech companies that rely mainly on business-to-business sales aren't as sensitive to weakness in consumer spending.
Keep Apple on a watch list (for now)
Apple is a decent stock to buy in 2026, but it's not all that compelling. Investors can buy a high-octane growth stock like Broadcom for a similar valuation, or get far more balanced earnings growth from Microsoft, or high margins and solid earnings from Meta at a far less expensive valuation.
The slower a company's earnings growth, the more critical you should be of its valuation. And in Apple's case, it's somewhere between a tech stock and a consumer-facing company.
In terms of consumer-facing companies, I would much rather buy high-yield dividend stocks like Coca-Cola and Procter & Gamble, which are passive-income powerhouses at far more attractive valuations than Apple.
That said, investors who believe in Apple's ability to capitalize on AI may still want to consider buying Apple now. And if there is a sell-off in AI stocks or a pullback in hyperscaler spending on AI, I would expect Apple to hold up far better than companies that have been pouring capital into long-term AI investments. Apple has an impeccable balance sheet and consistently generates gobs of free cash flow, which it uses to buy back stock and invest in long-term projects.
In sum, there are worse ideas than buying Apple after its latest pullback, but it's not a screaming buying opportunity by any means.
Should you buy stock in Apple right now?
Before you buy stock in Apple, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Apple wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $461,527!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,155,666!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 197% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of January 29, 2026.
Daniel Foelber has positions in Nvidia and Procter & Gamble and has the following options: short February 2026 $150 calls on Procter & Gamble. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, Salesforce, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Apple Is the Second-Worst-Performing Dow Jones Stock So Far in 2026. Is the Sell-Off a Buying Opportunity?

In today's video, I discuss recent updates affecting Nvidia (NASDAQ: NVDA), Meta Platforms (NASDAQ: META), and other AI stocks. To learn more, check out the short video, consider subscribing, and click the special offer link below.
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*Stock prices used were the after-market prices of Jan. 28, 2026. The video was published on Jan. 28, 2026.
Should you buy stock in Meta Platforms right now?
Before you buy stock in Meta Platforms, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Meta Platforms wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $461,527!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,155,666!*
Now, it’s worth noting Stock Advisor’s total average return is 950% — a market-crushing outperformance compared to 197% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of January 29, 2026.
Jose Najarro has positions in Advanced Micro Devices, Meta Platforms, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

AMD, Broadcom, and Nvidia Stock Investors Just Got Fantastic News from CEO Mark Zuckerberg

For Immediate Release
Chicago, IL – January 29, 2026– Zacks Director of Research Sheraz Mian says, "Total earnings for the 106 S&P 500 members that have reported Q4 results are up +14.9% from the same period last year on +7.9% higher revenues."
Taking Stock of Q4 Earnings Season
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The picture emerging from the Q4 earnings season is one of a steadily improving earnings outlook that is starting to show up in a favorable estimates revisions trend, particularly for some of the economically sensitive sectors like Basic Materials, Autos, Construction, and others. We should note here that the revisions trend has been consistently positive for the Tech sector for the last many quarters.
Total earnings for the 106 S&P 500 members that have reported Q4 results are up +14.9% from the same period last year on +7.9% higher revenues, with 76.4% beating EPS estimates and 63.2% beating revenue estimates.
The Q4 earnings and revenue growth pace at this stage represent a clear acceleration from what we had seen from this group of companies in other recent periods. Positive beats are less numerous this reporting cycle, with the EPS and revenue beats percentages tracking below the 20-quarter averages for this group of index members.
The Tech sector has been a key growth driver since 2023 and is on track to play that role in 2025 Q4 and beyond as well. Q4 earnings growth for the S&P 500 index drops to +5.5% from +9.2% after removing the Tech sector’s enormous contribution from the aggregate numbers. The Tech sector is currently expected to account for almost half of S&P 500 earnings growth in 2026.
Q4 earnings for the ‘Magnificent 7’ group of companies, which includes the likes of Meta Platforms META, Microsoft MSFT and Tesla TSLA, are expected to be up +17.1% from the same period last year on +16.7% higher revenues. Excluding the ‘Mag 7’ contribution, Q4 earnings for the rest of the index would be up only +6.3% (vs. +9.2%).
The Earnings Big Picture
The Tech sector has an outsized role in the S&P 500 index. The sector is expected to bring 36.1% of the index’s total earnings over the coming four-quarter period and currently accounts for 43.3% of the index’s total market capitalization. The Tech sector’s positive estimate revision trend is a major reason its members enjoy a strong market following and support.
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Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
See
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Zacks Earnings Trends Highlights: Meta, Microsoft and Tesla

Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
The picture emerging from the Q4 earnings season is one of a steadily improving earnings outlook that is starting to show up in a favorable estimates revisions trend, particularly for some of the economically sensitive sectors like Basic Materials, Autos, Construction, and others. We should note here that the revisions trend has been consistently positive for the Tech sector for the last many quarters.
Total earnings for the 106 S&P 500 members that have reported Q4 results are up +14.9% from the same period last year on +7.9% higher revenues, with 76.4% beating EPS estimates and 63.2% beating revenue estimates.
The Q4 earnings and revenue growth pace at this stage represent a clear acceleration from what we had seen from this group of companies in other recent periods. Positive beats are less numerous this reporting cycle, with the EPS and revenue beats percentages tracking below the 20-quarter averages for this group of index members.
The Tech sector has been a key growth driver since 2023 and is on track to play that role in 2025 Q4 and beyond as well. Q4 earnings growth for the S&P 500 index drops to +5.5% from +9.2% after removing the Tech sector’s enormous contribution from the aggregate numbers. The Tech sector is currently expected to account for almost half of S&P 500 earnings growth in 2026.
Q4 earnings for the ‘Magnificent 7’ group of companies, which includes the likes of Meta Platforms META, Microsoft MSFT, and Tesla TSLA, are expected to be up +17.1% from the same period last year on +16.7% higher revenues. Excluding the ‘Mag 7’ contribution, Q4 earnings for the rest of the index would be up only +6.3% (vs. +9.2%).
The Earnings Big Picture
The chart below shows expectations for 2025 Q4 in terms of what was achieved in the preceding four periods and what is currently expected for the next three quarters.
Image Source: Zacks Investment Research
The chart below shows the overall earnings picture for the S&P 500 index on an annual basis.
Image Source: Zacks Investment Research
The Tech sector has an outsized role in the S&P 500 index. The sector is expected to bring 36.1% of the index’s total earnings over the coming four-quarter period and currently accounts for 43.3% of the index’s total market capitalization. The Tech sector’s positive estimate revision trend is a major reason its members enjoy a strong market following and support.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Taking Stock of the Q4 Earnings Season

Key Points
The midpoint of the social media company's capital expenditure guidance implies 73% year-over-year growth.
Meta guided for a significant acceleration in its revenue growth rate in Q1.
The company's costs and expenses are growing faster than revenue, weighing on earnings growth.
The big news that shocked investors when Meta Platforms (NASDAQ: META) released its third-quarter update in late October was the social media company's plans for capital expenditures to soar in 2026. While the company didn't provide the exact figure at the time, management indicated that the dollar growth in capital expenditures in 2026 would be significantly higher than it was in 2025. In other words, management was essentially saying: Expect a figure north of $100 billion.
With the tech giant's fourth-quarter results (along with management's full-year outlook) out, we now have a much better idea of where exactly capital expenditures may fall in 2026. Meta said in its fourth-quarter update on Wednesday afternoon that it expects capital expenditures for the year to be between $115 billion and $135 billion.
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Here's a closer look at Meta's fourth-quarter results and what this number means for the company and investors.
Undeniable momentum
Meta's revenue in Q4 rose 24% year over year, putting its top line at $59.9 billion for the period. Showing how the company finished the year strong, this is a higher growth rate than its full-year 2025 revenue growth of 22%.
Even more, Meta managed to grow its earnings per share 11% year over year in Q4, even as costs and expenses soared 40%.
Fueling the quarter was a 7% year-over-year increase in daily active users across its platforms, 18% growth in ad impressions, and 6% growth in average price per ad.
And if you had any doubts about whether the company's investments in AI (artificial intelligence) are paying off, think again. The midpoint of management's guidance for first-quarter revenue of $53.5 billion to $56.5 billion implies a year-over-year revenue growth rate of 30% -- a huge acceleration.
Soaring costs
With all of this said, accompanying Meta's soaring growth is even faster spending growth.
Starting with Meta's outlook for capital expenditures in the range of $115 to $135 billion, the midpoint of this forecast calls for 73% year-over-year growth -- and that's on top of 84% growth in 2025.
Growth in capital expenditures like this is fundamentally changing Meta's cost structure. Indeed, this is why management expects one of its largest drivers in 2026 expense growth to be higher depreciation. After all, most capital expenditures begin as a cash item on the cash flow statement and eventually find their way to the income statement in the form of depreciation -- and Meta's big spending on AI infrastructure is doing just that.
Indeed, turning to the income statement, management said it expects full-year 2026 total expenses to be between $162 billion and $169 billion. The midpoint of this guidance range implies more than 40% year-over-year growth.
The net result? Even though Meta clearly expects to start 2026 with a significant step-up in revenue growth, management's guidance for operating income this year didn't have the same sizzle. Management simply said it expects full-year 2026 operating income will be "above" 2025 operating income.
In fact, we're already seeing the deleveraging in Meta's earnings profile caused by its big spending. The company's 11% year-over-year earnings-per-share growth in its fourth quarter lagged its 24% revenue growth by a wide margin.
Is the big spending worth it?
The big question on investors' minds, therefore, is whether or not this big spending will eventually pay off for Meta.
Sure, based on management's first-quarter outlook, it looks like it's already starting to pay off in top-line growth. But this spending will likely be a drag on earnings-per-share growth in 2026. So investors will need to look beyond 2026 to decide whether these investments will ultimately be worth it. If these investments help Meta build a personal superintelligence like the company hopes to, and revenue growth remains at elevated levels beyond 2026, the deleveraging we are seeing today in Meta's growth profile could turn into operating leverage later on.
Fortunately, the stock's valuation going into the earnings wasn't extraordinarily high relative to Meta's recent strong growth, so investors seemed to be leaving some room for error if the company's investments don't pay off handsomely. But with the stock soaring about 8% in after-hours on Wednesday as of this writing, investors clearly have more confidence that Meta's year of massive spending will be worthwhile.
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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.