Meta’s Q1 revenue surpasses expectations

Meta Platforms has delivered strong first-quarter financial results that exceeded analyst expectations, primarily driven by robust advertising performance. The company’s stock jumped nearly 6% in after-hours trading as investors responded positively to revenue growth and profit figures that surpassed forecasts, despite broader market concerns about potential economic impacts from tariffs.

The big picture: Meta reported Q1 revenue of $42.31 billion, beating analyst estimates of $41.40 billion, while delivering profits of $6.43 per share against expectations of $5.28 per share.

• The company projects second-quarter revenue between $42.5 billion and $45.5 billion, aligning with analyst forecasts of $44.01 billion.
• Family daily active people (DAP), which tracks unique users who open any Meta app daily, grew 6% year-over-year to 3.43 billion.

Key financials: Meta has significantly increased its 2025 capital expenditure forecast to between $64 billion and $72 billion, up from previous guidance of up to $65 billion.

• CFO Susan Li attributed the increased spending to additional data center investments supporting AI initiatives and rising hardware costs.
• Despite higher capital expenditures, Meta lowered its total expense forecast for the year to between $113 billion and $118 billion, down from earlier projections of $114 billion to $119 billion.

Market impact: Meta’s increased AI investment plans helped boost confidence in the semiconductor sector, with shares of key chip manufacturers rising following the announcement.

• Nvidia shares climbed 2.8% while Advanced Micro Devices rose 2% in response to Meta’s and Microsoft’s financial results.
• The increased spending on data centers helped counter analyst concerns from March that major tech companies might be pulling back on new data center commitments.

Challenges ahead: Meta faces significant hurdles beyond its financial performance, including regulatory scrutiny and questions about its AI competitiveness.

• The company is currently defending against a high-stakes Federal Trade Commission trial seeking to unwind its acquisitions of Instagram and WhatsApp.
• Meta is also battling perceptions it may be lagging in the AI race after its recently released Llama 4 language models reportedly underperformed expectations.