Meta Platforms saw its stock rise after hours, thanks to positive spending forecasts for the full year. Initially, the stock fell 3.7% to $635 when the company projected expenses of $162 billion to $169 billion for 2026. However, it later bounced back by 4%, reaching $695 after an optimistic revenue forecast for Q1 2026. Meta is investing more in AI data centers, showing its commitment to artificial intelligence. In the fourth quarter of 2025, the company reported adjusted earnings per share of $8.88 and revenue of $59.89 billion. These numbers were better than expected, with earnings surpassing estimates by $0.66 and revenue exceeding predictions by $1.42 billion.

Highlights Of Q4 Results

In Q4, sales grew by 24% compared to the previous year, and ad impressions on Meta’s apps increased by 18% year-on-year. December also saw a 7% rise in average daily active users, totaling 3.58 billion. The average ad price went up by 6% compared to last year. For Q1 2026, Meta expects revenue between $53.5 billion and $56.5 billion, which is higher than the consensus estimate of $51.41 billion. The stock’s jump to $695 came after a strong Q1 revenue forecast, easing concerns about high spending. For traders, there was a significant drop in implied volatility, falling from over 55% to around 35% overnight. This change makes it cheaper to enter new options positions compared to just a day earlier. The positive guidance has boosted investor confidence, with more than 85% of analysts maintaining buy ratings and raising price targets to about $750. With this favorable sentiment and lower costs for options, strategies like buying March 2026 call options or selling out-of-the-money puts to earn premium are worth considering. This approach is further backed by the Nasdaq 100, which reached a record high just last week.

Market Reaction And Strategy

However, we shouldn’t overlook the market’s initial negative response to the 2026 expense forecast. A similar pattern followed the Q3 2025 report, with the stock stabilizing for almost two weeks before rising again. This indicates that patience may pay off, and waiting for a slight pullback to the $670-$680 range could be wise before making new long positions. Given the mixed signals of strong growth paired with high spending, a bull call spread could be a smart move. For example, buying a February $700 call while selling a February $730 call would reduce initial costs. This strategy allows for profits if the stock gradually increases over the next few weeks while limiting potential risks. Create your live VT Markets account and start trading now.

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