Meta Surpasses Wall Street Expectations with Quarterly Revenues Boosted by Billion-Dollar AI Investments

On Wednesday, Meta announced its revenues, exceeding Wall Street’s forecasts for yet another quarter, while simultaneously generating billions with artificial intelligence.

In the first quarter of 2025, Meta reported a revenue of $423.2 billion, surpassing both its own projected high of $41.8 billion and the Wall Street expectation of $413.8 billion.

The company also disclosed earnings per share of $6.43, significantly exceeding Wall Street’s prediction of $5.27, leading to a surge in stock prices after market hours.

“This is a strong start to what is set to be a pivotal year for us. Our community continues to expand, and our business model is performing effectively,” stated Mark Zuckerberg, Meta’s CEO. “We are making notable advancements in AI glasses and Meta AI, with approximately 1 billion active monthly users.”

Zuckerberg conveyed in a discussion with investors that the company is performing well, its platform is expanding, and it is prepared to navigate the prevailing macroeconomic uncertainties.

“We maintain the belief that this year will be crucial in our industry,” he remarked.

This marks a continuation of Meta’s succesful track record in surpassing Wall Street expectations over recent quarters. However, it remains uncertain whether this will alleviate investor apprehensions. Analysts expressed dissatisfaction regarding the company’s first-quarter revenue outlook shared at the end of 2024. The firm plans to allocate between $64 million and $72 billion for capital expenditures, focusing on building AI infrastructure, a revision from the previous estimate of $65 billion. Total expenses for the first quarter had already reached $24.76 billion, marking a 9% year-over-year increase. The unpredictable nature of Donald Trump’s tariffs could still disrupt the advertising market and cloud the company’s financial forecast for the upcoming quarters.

Senior analyst Minda Smiley from eMarketer noted that the company’s “optimistic second quarter guidance indicates a lack of expectation for a significant decline in advertising revenue due to tariffs.” However, she expressed doubt about Meta’s ability to avoid long-term recession effects.

“Conversely, companies may take advantage of economic instability. Advertisers are likely to shift their spending towards established platforms like Facebook and Instagram while avoiding smaller social media networks,” added Smiley. “Nevertheless, a significant portion of Meta’s revenue is relying on advertising from Chinese retailers such as Temu and Shein targeting US consumers, whose spending is decreasing due to changing trade conditions and tariffs.”

Meta’s continued spending also “remains a concern for investors,” according to Debra Aho Williamson, founder and chief analyst at Sonata Insights. “Despite this, Meta has stayed away from directly monetizing AI this year, instead focusing on enhancing AI engagement amongst developers, app users, and advertisers,” remarked Williamson.

In the lead-up to the revenue report, Meta has made headlines with mixed AI-related developments, including the release of a standalone AI application intended to compete with ChatGPT. A WSJ Report highlighted that existing chatbots integrated into various products, such as Facebook and Instagram, have enabled teenagers to engage in “romantic role-plays.” Meta executives have consistently emphasized the approximately 1 billion users of their AI chatbots. However, many of these users access chatbots through complex paths within WhatsApp, Instagram, and Facebook. The company has not disclosed specifics about user interactions with chatbots or the depth of these engagements necessary to classify as AI chatbot users.

Alongside ongoing antitrust trials—where the company faces allegations of establishing an illegal social media monopoly through the acquisition of Instagram and WhatsApp—additional concerns loom for analysts regarding Meta’s financial stability, despite the seemingly positive figures.

“Meta’s revenue announcements arrive during a turbulent period, as the company faces potential changes to its future. As discussed in court, the outcomes could fundamentally reshape the social media landscape,” observed Forrester VP Mike Pulx. “Focusing more resources on enhancing Threads and Facebook might be crucial, as these could be the last remaining platforms of value for the company. Additionally, it’s noteworthy that Meta has significantly reduced its workforce within the Reality Labs division, which is struggling and ongoing.”