Meta reports that despite Wall Street’s concerns about the U.S.-China trade war and economic uncertainty, Meta has increased the push for AI and increased spending, the Meta report said.
The company's first-quarter revenue rose 16% from a year ago to $42.3 billion, surpassing expectations of $41.4 billion. Net income jumped 35% to $16.7 billion, well above consensus estimates of $13.5 billion. Yuan shares rose more than 5% in after-hours trading on Wednesday.
The tech giant predicts its second-quarter revenue will be $42.5 billion - $455.5 billion, with the point range slightly higher than Wall Street's forecast of $43.8 billion.
"We have had a big year starting out, our community continues to grow, and our business is doing well," said CEO Mark Zuckerberg.
Zuckerberg's plan this year doubled Meta's plan to become a "AI leader", thus increasing spending on open source large language models and AI assistants. The company is also improving the content recommended in users’ Facebook and Instagram feeds, as well as the goals of its ads.
The bumper results seem to ease analysts’ concerns that President Donald Trump’s tariff policies and related economic uncertainty could beat Mehta’s advertising business and Zuckerberg’s AI ambitions. META generates about 10% of revenue from Chinese marketers, who have been curbing spending lately.
The company raised its full-year capital expenditure forecast to $64 billion to $72 billion on Wednesday and raised from $60 billion and $65 billion, citing "additional data center investment" to support its AI push and "increase the expected costs of infrastructure hardware." Trump poses a threat to global hardware supply chains.
Yuan estimates total spending in 2025 is $113 billion to $118 billion, slightly below $11.4 billion to $119 billion from previous outlook.
The result is a day after smaller rival Snap refused to share a second-quarter financial guidance, with revenues of “uncertainty” around economic conditions in the coming months and “headwinds” for the current quarter. Snap's shares closed 12.4% on Wednesday.
Meta recently made some AI announcements as it competes with competitors such as Openai, Elon Musk's Xai and Microsoft to dominate the Generative AI space.
In early April, Meta released the latest iteration of its open source AI model, Llama 4, and on Tuesday it launched a standalone application for its AI Assistant, comparable to Openai’s Chatgpt app.
Meta also took the step to becoming a cloud provider, announcing the Llama API as a developer platform built on the Llama model and was welcomed by analysts.
Zuckerberg has made recommendations to Trump, visiting the White House several times this year to improve relations with the president as lawmakers circle the AI industry.
Mehta is also fighting legal challenges from the U.S. Federal Trade Commission, which says the company retains an illegal monopoly. Earlier this year, Zuckerberg tried to negotiate a settlement to avoid a trial attempt.