Meta Platforms Inc. (META  ) stock surged after the company said ad sales are picking up fast and profits will keep growing, giving Wall Street fresh confidence that its AI push is paying off. The big question now is whether that momentum can hold as Meta ramps up spending on data centers, chips, and new tech to fuel its next wave of growth. JP Morgan analysts maintained their Overweight rating on Meta with a December 2026 price forecast of $825, according to a research note released Sunday by lead analyst Doug Anmuth.

Strong Q1 Revenue Outlook

Meta shares gained 7% following Wednesday's earnings announcement, far outpacing the S&P 500's 1% decline over the same period. The gains followed a powerful first-quarter outlook that showed foreign-exchange-neutral revenue growth accelerating to 22%-30% from 23% in the fourth quarter, a commitment to operating-income growth in 2026, and confirmation that losses in Reality Labs will peak next year.

JPMorgan analysts said the first-quarter revenue acceleration is particularly meaningful, adding that Meta still has "considerable headroom" for AI-driven ad growth as the company stacks new products, adds computing capacity and increasingly leverages large language models to improve ad targeting and performance.

JP Morgan projects reported revenue growth of 25.5% in 2026 with deceleration through the year, followed by 17% growth in 2027. The firm noted that investor discussions suggest 2026 revenue growth could range from 25% to 30%, with some believing the guided deceleration beyond the first quarter "will prove conservative."

Infrastructure Investments

That optimism is being balanced against Meta's rapidly rising cost base. The research note highlighted Meta's significantly elevated 2026 guidance of $162 billion to $169 billion in GAAP expenses, representing 38% to 44% year-over-year growth, alongside capital expenditures of $115 billion to $135 billion, up 65% to 94% year-over-year.

According to the analysts, Meta's net property, plant and equipment grew 45% year-over-year in 2025, led by servers and network assets, which reached $98 billion. JP Morgan projects capital expenditures of $133 billion in 2026 and $168 billion in 2027, resulting in free cash flow projections of just $5 billion in 2026 and $6 billion in 2027.

Reality Labs Losses To Peak In 2026

JP Morgan sees Meta's Reality Labs losses would peak in 2026 at approximately $19.7 billion, with the company planning to allocate 70% of Reality Labs operating expenses toward wearables initiatives and 30% toward VR and Horizon projects.

The analysts noted Meta's non-cancelable contractual commitments surged to $131 billion at the end of 2025, up from $33 billion at the end of 2024, primarily related to third-party cloud capacity agreements and infrastructure investments.

Going forward, JPMorgan said investor focus will shift to how well Meta sustains revenue growth beyond the first quarter, whether new forms of monetization emerge, and how quickly its large-language-model efforts move closer to the AI frontier.

META Price Action: Meta Platforms shares were down 0.69% at $711.59 at the time of publication on Monday, according to Benzinga Pro data.