The maker of Facebook and Instagram reported US$42.3bil in first-quarter sales. — Bloomberg
NEW YORK: Meta Platforms Inc has quelled Wall Street concerns about the impact of US President Donald Trump administration’s trade war on advertising sales, reporting first-quarter revenue that beat expectations and forecasting additional spending.
The maker of Facebook and Instagram reported US$42.3bil in first-quarter sales.
That beat analysts’ estimates of US$41.4bil for the quarter ended March 31.
The company also said Wednesday that current-quarter revenue will be in line with analysts’ expectations and that it is responding to the trade war by rethinking suppliers and projecting higher costs for infrastructure.
“We’re well positioned to navigate the macroeconomic uncertainty,” chief executive officer Mark Zuckerberg told investors on the company’s earnings call.
Meta needs its advertising business, which makes up 98% of the company’s revenue, to continue growing in order to fund an expensive expansion in artificial intelligence.
So far, artificial intelligence (AI) is helping improve ad targeting and personalisation of the content people see on social networks.
Meta is also investing heavily to keep pace with rivals like OpenAI and Alphabet Inc’s Google in developing large language models and chatbots.
Meta now expects to spend US$64bil to US$72bil, up from its prior outlook of US$60bil to US$65bil, attributing some of its spending to a wave of tariffs imposed by the Trump administration.
“The higher cost we expect to incur for infrastructure hardware this year really comes from suppliers who source from countries around the world, and there’s just a lot of uncertainty around this given the ongoing trade discussions,” chief financial officer Susan Li said on the call with investors.
Meta is working on mitigating that impact by “optimising our supply chain”.
Meta shares rose more than 4% in after-hours trading, after closing at $549. Shares of companies that make gear used in AI computing, including Nvidia Corp, also rallied after markets closed in New York.
Meta stock was down more than 6% year-to-date before the company reported earnings but has still performed better than most of America’s biggest technology companies amid a market selloff spurred by tariffs.
“While many companies have not been providing forward guidance amid tariff concerns and an uncertain macro environment, Meta did – a bullish sign,” said Andrew Rocco, a stock strategist at Zacks Investment Research.
Rocco pointed not just to the company’s second-quarter forecast but also to the increase in the company’s expected capital expenditures, which he said was a positive look for the broader AI sector.
Meta reported first-quarter earnings per share of US$6.43, up 37% from a year prior and surpassing the average analyst estimate of US$5.25.
The company’s social applications (apps) now reach 3.4 billion people around the world each day.
In January, Zuckerberg signalled heavy AI investment ahead, saying the company would ultimately spend hundreds of billions of dollars on the technology.
Those plans appear to be on track despite global economic turmoil, and even as Chinese AI companies figure out how to do more with less.
Earlier this year, a Chinese company called DeepSeek released a competitive model that it said used cheaper and less powerful chips.
Meta’s quarterly results come a day after the company hosted its inaugural LlamaCon conference, which was focused on its AI development efforts. — Bloomberg
