Meta Platforms Inc. (META) is spending money like it's going out of style, and investors seem perfectly fine with it. The stock jumped 7% after the company's latest earnings report showed that ad sales are accelerating and profits keep climbing, even as the broader S&P 500 slipped 1% during the same stretch. Apparently, Wall Street is willing to overlook some truly eye-watering infrastructure costs if the AI-powered ad engine keeps delivering.

JP Morgan analysts aren't backing away from the story either. They're sticking with their Overweight rating and a December 2026 price target of $825, according to a research note released Sunday by lead analyst Doug Anmuth. The thesis? Meta still has plenty of room to grow as it layers in new AI products, expands computing capacity, and uses large language models to make ad targeting even sharper.

Revenue Growth Is Actually Accelerating

Here's what caught everyone's attention: Meta's first-quarter outlook showed foreign-exchange-neutral revenue growth of 22% to 30%, up from 23% in the fourth quarter. That's acceleration, not deceleration, which is rare enough to make analysts sit up straight. The company also committed to growing operating income in 2026 and confirmed that Reality Labs losses will peak next year before starting to decline.

JP Morgan is projecting reported revenue growth of 25.5% in 2026, with some deceleration expected as the year progresses, followed by 17% growth in 2027. The firm noted that conversations with investors suggest 2026 revenue growth could land anywhere between 25% and 30%, and there's a belief among some that Meta's guidance for slower growth beyond the first quarter might turn out to be conservative.

The Infrastructure Bill Is Staggering

Now for the part that makes CFOs nervous. Meta is guiding 2026 GAAP expenses between $162 billion and $169 billion, representing year-over-year growth of 38% to 44%. Capital expenditures are expected to hit $115 billion to $135 billion in 2026, up 65% to 94% from the prior year. JP Morgan's model pushes that even higher, projecting $133 billion in capital spending for 2026 and $168 billion in 2027.

The result? Free cash flow is going to be squeezed down to roughly $5 billion in 2026 and $6 billion in 2027, according to JP Morgan's estimates. That's a dramatic shift for a company that has historically been a cash-generating machine. Meta's net property, plant and equipment grew 45% year-over-year in 2025, driven largely by servers and network assets that reached $98 billion.

Reality Labs Keeps Bleeding, But There's a Plan

JP Morgan expects Reality Labs losses to peak in 2026 at approximately $19.7 billion. Meta is allocating about 70% of Reality Labs operating expenses toward wearables initiatives and 30% toward VR and Horizon projects. It's a big bet on hardware that hasn't yet proven it can stand on its own financially.

Perhaps most striking: Meta's non-cancelable contractual commitments surged to $131 billion at the end of 2025, up from just $33 billion at the end of 2024. Those commitments are primarily tied to third-party cloud capacity agreements and infrastructure investments, meaning Meta has locked itself into this spending trajectory whether or not the AI payoff materializes immediately.

Looking ahead, JP Morgan says the key questions for investors will be whether Meta can sustain revenue growth beyond the first quarter, whether new monetization opportunities emerge, and how quickly the company's large-language-model work approaches the AI frontier. For now, the market seems willing to give Meta the benefit of the doubt.

META Price Action: Meta Platforms shares were down 0.69% at $711.59 at the time of publication on Monday.