Meta Platforms experienced a stock rise afterhours due to optimistic full-year spending projections. Initially, the stock dropped 3.7% to $635 after the company announced expected expenses between $162 billion and $169 billion for 2026. However, the stock later climbed by 4% to $695 following the improved Q1 2026 revenue forecast.
Meta has been increasing its capital expenditure on AI data centres, reflecting ongoing commitment to the AI domain. Moreover, Meta’s fourth quarter of 2025 was noteworthy, with adjusted earnings per share reported at $8.88 and revenue reaching $59.89 billion. These results surpassed consensus estimates, with earnings beating by $0.66 and revenue exceeding predictions by $1.42 billion.
Highlights Of Q4 Results
In Q4, sales rose 24% compared to the previous year, and ad impressions across Meta’s apps increased 18% year-on-year. December saw a 7% year-on-year rise in average daily active users, totalling 3.58 billion. The average ad price went up by 6% year-on-year. For Q1 2026, Meta forecasted revenue between $53.5 billion and $56.5 billion, standing above the consensus of $51.41 billion.
The after-hours jump to $695 followed a strong Q1 revenue forecast, overriding initial concerns about heavy spending. For derivative traders, the most immediate effect is the collapse in implied volatility, which we’ve seen drop from over 55% to near 35% overnight. This makes entering new options positions significantly cheaper than just yesterday.
The strong forward guidance has reinforced the bullish narrative, with over 85% of analysts reiterating buy ratings this morning and raising price targets towards the $750 level. Given the positive sentiment and lower options costs, buying March 2026 call options or selling out-of-the-money puts to collect premium are viable strategies. This approach is further supported by the Nasdaq 100’s performance, which posted a record high just last week.
Market Reaction And Strategy
However, we must not ignore the market’s initial negative reaction to the 2026 expense forecast. We saw a similar pattern after the Q3 2025 report, where the stock consolidated for nearly two weeks before continuing its upward trend. This suggests patience might be rewarded, perhaps by waiting for a small pullback to the $670-$680 range before establishing new long positions.
Considering the conflicting signals of strong growth and high spending, a bull call spread could be an effective way to proceed. For example, buying a February $700 call while simultaneously selling a February $730 call would limit the upfront cost. This strategy profits from a continued, but measured, rise in the stock price over the next few weeks while capping potential risk.
