Meta Boosts AI Spending and Reports Strong Q1 Results, Signaling Confidence in AI Strategy

Meta boosts capex forecast in push to be an 'AI leader'

Meta beat sales and earnings estimates in the first quarter and raised capital expenditures as it stepped up its push to lead in artificial intelligence. Revenues in the first three months ended March rose 16 per cent from a year ago to $42.3bn, beating expectations for $41.4bn. Net income jumped 35 per cent to $16.7bn, well above consensus estimates of $13.5bn. However, this was down from the previous quarter, when Meta reached more than $20bn. The shares were up more than 4 per cent after-hours. The company forecast its second-quarter revenues would be $42.5bn to $45.5bn, compared with consensus estimates of $43.8bn. It also raised its anticipated full-year capex to between $64bn and $72bn, from $60bn and $65bn, as chief executive Mark Zuckerberg doubled down on plans to make Meta an "AI leader". "We've had a strong start to an important year, our community continues to grow and our business is performing very well," Zuckerberg said.

Meta Says Its Numbers Show that AI Spending Is Paying Off

Meta (META) plans to boost its spending on AI. That didn't cool enthusiasm for the social media giant's stock. Shares of the Facebook parent surged more than 4% to just over $572 Thursday after the social media giant a day earlier eported better-than-expected quarterly results and pointed to growth in advertising -- which accounts for the bulk of Meta's revenue -- aided by its investments in AI. The reaction marks a departure from the same time last year, when shares had tumbled after Meta said it planned to spend more on AI, amid worries about whether the spending would be justified. "AI has already made us better at targeting and finding the audiences that will be interested in their products than many businesses are themselves, and that keeps improving," CEO Mark Zuckerberg told investors during Wednesday's earnings call. People are spending more time on Meta's apps as a result of improvements to its recommendation systems, Zuckerberg said, with users now spending 7% more time on Facebook. Instagram saw a 6% jump. Time on Threads -- which launched in 2023 -- jumped 35% as users also grew. Analysts -- including those from Citi, JPMorgan, Wedbush, and Jefferies -- raised their price targets for the stock Thursday, pointing to Meta's engagement and targeting gains. Analysts from Bank of America bumped their target to $690 from $640, citing Meta's "tangible business results" from AI. Morgan Stanley analysts, who raised their target to $650 from $615 said Meta's "best in class and still improving ad product and relative [return on investment] are delivering results." "Even with our significant investments, we don't need to succeed in all of these areas to have a good ROI," Zuckerberg said during Wednesday call. "But if we do, then I think that we will be wildly happy with the investments that we are making."

Meta Boosts Spending Plans to Grow Its AI Capacity

Kara Greenberg is a senior news editor for Investopedia, where she does work coordinating, writing, assigning, and publishing multiple daily and weekly newsletters. Prior to joining Investopedia, Kara was a researcher and editor at The Wire. Earlier in her career, she worked in financial compliance and due diligence at Loomis, Sayles & Company, and The Bank of New York Mellon. America's tech giants aren't showing signs of slowing AI spending plans despite a stretch of economic uncertainty that has meant tough times for technology shares. After Meta Platforms (META) late Wednesday reported better-than-expected quarterly earnings, touting its advertising revenue growth, the social media giant said it plans to boost its capital expenditures this year to $64 billion to $72 billion to grow its AI capacity. CEO Mark Zuckerberg told investors on a conference call that he believes the opportunities for the company in AI are "staggering." Meta is boosting its planned investments both to add capacity this year and to prepare for coming years, he said. The move comes after Meta said in January that it planned to spend $60 billion to $65 billion in capital expenditures this year, up from $39 billion in 2024, as the tech giant doubles down on the emerging tech. Several of Meta's Magnificent Seven peers, including Microsoft (MSFT) and Google parent Alphabet (GOOGL), have made similar announcements. Alphabet told investors in February it would spend $75 billion in capital expenditures this year, while Microsoft projected $80 billion on infrastructure in fiscal 2025. In its earnings call Wednesday, Microsoft said it would maintain its spending outlook, as did Alphabet last week. Meta earlier this week released its first Meta AI standalone app, allowing users to interact with Meta AI in a dedicated app, similar to the ChatGPT app. "We've got a lot more exciting work in the pipeline that I'm looking forward to sharing soon," Zuckerberg said. Meta shares rose over 5% in after-hours trading. The stock was down 6% for the year so far through Wednesday's close.

NVIDIA stock gains as Meta boosts AI capex... again By Investing.com

Investing.com -- Shares of AI giant NVIDIA Corporation (NASDAQ:NVDA) gained 1.8% in after-hours trading Wednesday after hyperscaler Meta Platforms Inc (NASDAQ:META) increased its capex budget for this year again, citing AI spending. Meta said it now anticipates full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64-72 billion, increased from its prior outlook of $60-65 billion. "This updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware," Meta said. "The majority of our capital expenditures in 2025 will continue to be directed to our core business." The news comes amid worries about possible AI capex slowdowns, on concerns that hyperscalers will try to be more efficient with spending, using more DeepSeek-like technology.