Good morning. During earnings calls this week, the CFOs of big tech companies, Meta and Microsoft, delivered a similar message: the AI race requires unprecedented capital spending, but that spending is disciplined, demand-driven, and ultimately margin-accretive rather than reckless.
The companies urged investors to look past headline numbers and focus instead on utilization, long-term economics, and visible revenue traction.
Meta: Spending big, signaling profit
Meta CFO Susan Li emphasized the trade-off between a significant increase in infrastructure investment and profitability. Despite a “meaningful step-up” in spending, the company expects 2026 operating income in absolute dollars to exceed 2025 levels, even as operating margins may come under pressure, Li said on the company’s Q4 2025 earnings call. She linked the higher investment to Meta’s long-term superintelligence roadmap and to an expansion of data-center capacity required to support core AI workloads across advertising, ranking, and product development.
The company now guides 2026 capital expenditures, including finance leases, of roughly $115–$135 billion, placing it among the largest single-year capex spenders in the AI and hyperscaler universe. In 2025, Meta’s capex was $72 billion. Li described the increase as an extension of Meta’s core business strategy: using AI to improve ad targeting, creative tools, and advertiser performance, then scaling infrastructure behind use cases with demonstrated monetization. By pairing AI-driven capex guidance with assurances on operating income, Meta is signaling that spending is accelerating but remains disciplined rather than open-ended.
Meta’s confidence rests primarily on the strength of its advertising business, not standalone AI services. The company guided revenue above Wall Street expectations and pointed to continued advertiser momentum into early 2026. In Q4, Meta delivered $59.89 billion in revenue, beating estimates, and generated more than $200 billion in annual revenue, highlighting the cash-generating ad engine supporting the infrastructure ramp.
Microsoft: Investing in AI for the long term
Microsoft is reporting unusually high capital spending tied to AI and data‑center build-outs. Its latest quarterly capex, about $37.5 billion in Q2 FY26, is large by historical standards and relative to typical tech sector capex, up from $34.9 billion in the preceding quarter.
Microsoft CFO Amy Hood framed the investment strategy on Wednesday’s earnings call as focused on meeting sustained demand and optimizing capacity over the useful life of assets rather than emphasizing quarter-to-quarter margin optics. Much of the spending was on short-lived assets like GPUs and CPUs to support AI workloads, and while this can weigh on near-term cloud margins, Hood pointed to strong cloud demand: Microsoft Cloud exceeded $50 billion in quarterly revenue, and Azure grew about 39 % year-over-year, supporting continued strategic investment.
Microsoft posted $81. 3 billion in revenue for the quarter, up 17% year-over-year and ahead of analyst expectations. But as Fortune’s Alexei Oreskovic writes, investors were picky about the Azure cloud business growing at a slightly slower pace than in previous quarters (despite the fact that it still grew a healthy 39%).
Taken together, Meta and Microsoft are signaling that while AI-driven capex is accelerating, disciplined investment and a focus on monetization should support sustainable growth and profitability. Tech CFOs are tasked with conveying that strategy clearly to investors, bridging the gap between bold spending and long-term returns.
Thanks for reading. Have a good weekend. Take care.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
CFO moves this week:
Amanda L. Engles was promoted to EVP and CFO of CB Financial Services, Inc. (NASDAQGM: CBFV), the holding company of Community Bank. Engles most recently served as interim CFO of the company and served as SVP and CFO of the Bank, positions she assumed in February 2025. She joined Community Bank in March 2023 as SVP and director of accounting.
Patrick O'Connell was appointed CFO of OnePay, a consumer fintech. Currently, O'Connell serves as CFO of AMC Networks, leading global financial operations across a portfolio of streaming services and networks. Earlier in his career, he held senior strategy roles at CBS Corporation and BRANDED, and spent 14 years at Goldman Sachs, advising CEOs, CFOs, and boards on major financial transactions.
Tahnil Davis was appointed interim CFO of The Trade Desk (NASDAQ: TTD), an independent advertising technology company, effective Jan. 24. The company is conducting a search for a permanent successor. Davis currently serves as the company’s chief accounting officer and has been with The Trade Desk for nearly 11 years. She succeeds Alex Kayyal.
Christopher Papa was appointed EVP and CFO of Americold Realty Trust, Inc. (NYSE: COLD), a real estate investment trust that specializes in temperature‑controlled warehouses and logistics. Papa will join the company on Feb. 23. He has nearly 40 years of experience across real estate, accounting, tax, investor relations and corporate finance. Papa currently serves as EVP and CFO at CenterPoint Properties.
Frank Sluis was appointed CFO of On Holding AG (NYSE: ONON), a premium sportswear brand, effective May 1. Sluis succeeds Martin Hoffmann, who took on an expanded role as sole CEO last year, while continuing his CFO responsibilities. Sluis has more than 25 years of experience. Most recently, he served as CFO for Europe and Indonesia at Ahold Delhaize, a food retail group, a position he has held since 2021. Sluis also previously held finance leadership positions at Reckitt Benckiser and Unilever.
Sardar Abubakr was appointed CFO of NetSol Technologies, Inc. (Nasdaq: NTWK), a provider of software for the asset finance and leasing industry. Roger K. Almond, the company’s current CFO, will remain with NetSol as chief accounting officer, responsible for global accounting operations. Abubakr brings more than two decades of international leadership experience. Most recently, he served as VP of new business ventures and M&A at Jazz, a subsidiary of VEON Group.
Charles Macon was appointed CFO of On The Go, an operator of airport dining and hospitality experiences across major North American airports. Macon will oversee On The Go's financial strategy and partner with the executive team and ownership groups. He brings more than 20 years of financial and operational leadership experience across multi-unit hospitality, consumer services, and private-equity-backed businesses.
Patrice Launay was appointed CFO of Altanine, a specialty pharmaceutical company. Launay brings two decades of experience in accounting, finance, and public company leadership. He served as the CFO of a Nasdaq-listed company, leading them through their IPO and later returning to oversee SEC reporting and support additional capital raises.
Big Deal
"2025 US IPO activity fuels confidence for 2026" is a new EY report. The momentum in IPO activity, particularly in the second half of 2025, has created significant optimism for investors and potential issuers in 2026.
Strong interest in AI and defense-related technology companies is expected to continue, and the biotech sector could return as a meaningful contributor with the recovery in sector valuations over the past year, according to the report.
The trajectory of interest rates could be a defining factor, as will sponsor-backed IPO activity levels. "As always, IPO hopefuls should be proactive about public company preparation as exogenous events could impact transaction windows, similar to what transpired in 2025," EY recommends.
Going deeper
Here are four Fortune weekend reads:
"Remove Tesla’s non-repeatable profits, and the stock has never been more expensive—now boasting a ‘core’ PE of 632" By Shawn Tully
"Apple’s blowout Q1 results were a reminder of what makes the company so impressive—and why it’s floundering in AI" By Alexei Oreskovic
"Fortune 500 CEOs are no longer giving employees an A for effort. Now they want proof of impact" By Claire Zillman
"Detroit’s top carmaker just wrote down $7.6 billion on its EV business—and grew its market cap by the same amount. Here’s how GM did it" By Nick Lichtenberg
Overheard
"There are rays of hope. Advances in personal health technology, prevention strategies, and early detection and screening methodologies offer promising opportunities to intervene earlier and improve long-term outcomes."
—Brooks Tingle, president and CEO of John Hancock, writes in a Fortune opinion piece titled, "John Hancock CEO: We all have a role in driving better health outcomes for Americans."
