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Meta to report quarterly earnings amid tariff uncertainty and AI investment Meta’s quarterly earnings beat Wall Street expectations as its AI investments rise by billions
(about 3 hours later)
Wall Street is projecting the company will post $41.36bn in revenue on $5.21 in earnings per share ‘We’ve had a strong start to an important year’, Zuckerberg said as company posts $42.35bn in revenue for first quarter
Meta is set to report its first quarter earnings on Wednesday after the bell, and investors will be looking for news on whether the company met its quarterly revenue goals of somewhere between $39.5bn and $41.8bn. Meta reported earnings on Wednesday, beating Wall Street’s expectations for yet another quarter even as it lavishes billions on artificial intelligence.
Wall Street is projecting the company will post $41.36bn in revenue on $5.21 in earnings per share. Meta posted $42.32bn in revenue in the first quarter of 2025, beating both its own quarterly revenue goals of $41.8bn at the higher end and Wall Street expectations of $41.38bn.
While Meta has repeatedly beaten Wall Street expectations in the past few quarters, analysts were disappointed by the first quarter revenue outlook Meta chief executive Mark Zuckerberg shared at the end of 2024. The company is also planning on spending up to $65bn on AI infrastructure by the end of 2025. Uncertainty over Donald Trump’s sweeping tariffs may yet roil ad markets, clouding the company’s financial outlook for near future quarters. The company also reported $6.43 in earnings per share, beating Wall Street projections of $5.27. Shares jumped in after-hours trading.
“Meta’s enormous investment in AI infrastructure will continue to weigh heavily on investors when the company reports quarterly earnings on April 30, 2025,” said analyst Debra Aho Williamson, founder and chief analyst of Sonata Insights. “But Meta will resist directly monetizing AI this year, focusing instead on building AI usage among its app users, advertisers and developers using Llama.” “We’ve had a strong start to an important year, our community continues to grow and our business is performing very well,” said Meta’s chief executive, Mark Zuckerberg. “We’re making good progress on AI glasses and Meta AI, which now has almost 1bn monthly actives.”
In the weeks leading up to the earnings report, Meta has had a mix of AI-related news including the launch of a standalone AI app that would serve as its ChatGPT competitor. But a WSJ report exposed the existing chatbots integrated into the company’s various products, including Facebook and Instagram, were given the ability to perform “romantic role play” even with the platforms’ teen users. Executives at the company, which repeatedly has touted its nearly 1 billion users of its AI chatbots, also admit that many of those users access the chatbot through its hard-to-avoid takeover of the search bars of WhatsApp, Instagram and Facebook. The company has not detailed how many interactions with the chatbot or how deep those interactions need to be to consider a person a user of the AI chatbot. This continues Meta’s streak of beating Wall Street expectations over the past few quarters. However, it’s unclear if it will be enough to quell investor concerns. Analysts were disappointed by the first quarter revenue outlook Zuckerberg shared at the end of 2024. The company has also updated its outlook on spending for the next year with plans to spend anywhere from $64-72bn in capital expenditures including the cost of building out AI infrastructure. That is up from $65bn the company originally said it was expecting to spend in 2025. Total costs and expenditures for the first quarter was already at $24.76bn, a 9% increase compared to the year prior. Uncertainty over Donald Trump’s sweeping tariffs may yet roil ad markets, clouding the company’s financial outlook for near future quarters.
Paired with Meta’s ongoing antitrust trial – where the company faces claims that it built an illegal social media monopoly with its acquisition of Instagram and WhatsApp – the uncertain AI future adds to the concerns some analysts may have around Meta’s financials despite what it may look like on paper. “Meta’s enormous investment in AI infrastructure will continue to weigh heavily on investors when the company reports quarterly earnings on April 30, 2025,” said analyst Debra Aho Williamson, the founder and chief analyst of Sonata Insights. “But Meta will resist directly monetizing AI this year, focusing instead on building AI usage among its app users, advertisers and developers using Llama.”
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“Meta’s earnings call comes at a precarious time where the company’s future is literally being debated in court – the results of which could fundamentally alter the social media landscape,” said Forrester VP, Research Director Mike Proulx. “Meta is smart to direct more resources into improving Threads and Facebook since those could be the only two apps the company is left with. It’s also notable that Meta just laid off a number of employees in its Reality Labs division, which has been a continued and growing leaky bucket for Meta.” In the weeks leading up to the earnings report, Meta has had a mix of AI-related news including the launch of a standalone AI app that would serve as its ChatGPT competitor. But a WSJ report exposed the existing chatbots integrated into the company’s various products, including Facebook and Instagram, were given the ability to perform “romantic role play” even with the platforms’ teen users. Executives at the company, which repeatedly has touted its nearly 1 billion users of its AI chatbots, also admit that many of those users access the chatbot through its hard-to-avoid takeover of the search bars of WhatsApp, Instagram and Facebook. The company has not detailed how many interactions with the chatbot or how deep those interactions need to be to consider a person a user of the AI chatbot.
Paired with Meta’s ongoing antitrust trial – where the company faces claims that it built an illegal social media monopoly with its acquisition of Instagram and WhatsApp – the uncertain AI future adds to the concerns some analysts may have around Meta’s financials despite what it may look like on paper.
“Meta’s earnings call comes at a precarious time where the company’s future is literally being debated in court – the results of which could fundamentally alter the social media landscape,” said Forrester VP’s research director, Mike Proulx. “Meta is smart to direct more resources into improving Threads and Facebook since those could be the only two apps the company is left with. It’s also notable that Meta just laid off a number of employees in its Reality Labs division, which has been a continued and growing leaky bucket for Meta.”