Despite strong performance, Meta confronts mounting questions about its strategic direction and spending priorities.

"We spend so much time talking about AI investments, but the real question is whether Meta has cracked the code on driving incremental conversions versus just relying on low-hanging fruit," said our analyst Max Willens on a recent episode of "Behind the Numbers."

Here are some of the pressing questions facing Meta in 2026.

Is AI spending actually a problem?

Meta's capital expenditure is expected to reach between $115 billion and $135 billion this year, with a significant share directed toward its AI initiatives. This is nearly double last year's spending and four to five times the 2023 amount.

The numbers sound alarming, but Meta's advertising business continues to deliver exceptional results. Meta's US ad revenue is expected to grow 14.2% this year to reach $91.72 billion, according to EMARKETER's December 2025 forecast.

"When you have that kind of operating profit coming in and when you are telling analysts and investors that you are projecting to have even more operating income in 2026 than you had in 2025, then it's kind of hard to argue with the results," Willens said.

However, not every Meta bet has succeeded. The company's Reality Labs division posted a $6 billion operating loss in Q4 while generating less than $1 billion in revenue. Since late 2020, Reality Labs has accumulated nearly $80 billion in total operating losses.

What's Meta's vision for its AI agent?

Analysts wonder if Meta's AI agent will be designed to help users answer questions, make friends, shop, or find information about current events.

"My suspicion is that it's going to be oriented around shopping, and that's largely because of how effective they have been for years now at driving and facilitating ecommerce," Willens said.

Analysts say Meta's success will depend less on whether it releases a successor to Llama 4 and more on whether it can deliver practical value to users.

Willens said the shopping angle makes strategic sense. Meta has proven highly effective at driving e-commerce transactions, with numerous advertisers using its automated systems to facilitate shopping both online and offline. An AI agent optimized for commerce could represent a natural evolution of this strength.

Is 2026 Meta's "big tobacco moment?"

Meta faces multiple high-profile legal cases in 2026 centered on allegations that the company misled the public about app safety despite knowing certain design choices contributed to harm among young users.

"We've definitely had a turning point," said our analyst Minda Smiley. "Between all these trials that social media companies are facing around claims that they've harmed young users, we're seeing regulation at the state level and the federal level. Classroom cell phone bans have really taken off very quickly."

The regulatory pressure extends globally. Australia became the first country to enact a social media ban for children under 16 last year.

"It's not just a bunch of cranky, crunchy moms in California. It's Australia, it's France, it's Denmark, it's the United States, it's Canada," Willens said. "That is a different kind of circumstance and scrutiny. And it seems impossible that it's not going to change something, but we just don't know what that changes."

However, public concern doesn't necessarily translate to declining usage. Willens said the situation may parallel the NFL's experience with CTE awareness, an initial public alarm that ultimately didn't diminish the sport's cultural dominance.

Listen to the full episode.

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