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AmextaFinance > News > Meta boosts spending forecast in push to be ‘AI leader’
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Meta boosts spending forecast in push to be ‘AI leader’

News Room
Last updated: 2025/04/30 at 7:09 PM
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Meta reported better than forecast results and boosted spending as it stepped up its push to lead in artificial intelligence, despite Wall Street fears over a US-China trade war and economic uncertainty. 

Revenues in the company’s first quarter 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. Meta shares were up more than 5 per cent in after-hours trading on Wednesday.

The tech giant forecast its second-quarter revenues would be $42.5bn-$45.5bn, with the midpoint of that range slightly higher than Wall Street’s forecast of $43.8bn.

“We’ve had a strong start to an important year, our community continues to grow and our business is performing very well,” chief executive Mark Zuckerberg said.

Zuckerberg has this year doubled down on his plans to make Meta the “AI leader”, boosting spending to develop its open source large language models and AI assistant. The company has also been improving the content it recommends in users’ Facebook and Instagram feeds, as well as the targeting of its advertising.

The bumper results appeared to assuage analysts’ concerns that President Donald Trump’s tariffs policy and related economic uncertainty could knock Meta’s advertising business as well as Zuckerberg’s AI ambitions. Meta generates about 10 per cent of its revenues from China-based marketers, which have recently been curbing spending.

The company on Wednesday raised its full-year capital expenditure forecast to between $64bn and $72bn, from $60bn and $65bn, citing “additional data centre investments” to support its AI push as well as an “increase in the expected cost of infrastructure hardware”. Trump’s tariff onslaught has posed a threat to global hardware supply chains.

Meta estimated total expenses in 2025 in the range of $113bn to $118bn, down slightly from its prior outlook of $114bn to $119bn.

The results come a day after smaller rival Snap declined to share financial guidance for the second quarter at its earnings, citing “uncertainty” around economic conditions in the coming months and “headwinds” in the current quarter. Snap’s shares closed 12.4 per cent lower on Wednesday.

Meta has made several recent AI announcements as it races rivals such as OpenAI, Elon Musk’s xAI and Microsoft to dominate in the field of generative AI.

In early April, Meta released the latest iteration of its open source AI model, Llama 4, while on Tuesday it launched a standalone app for its AI assistant, rivalling OpenAI’s ChatGPT app.

Meta also took a step towards becoming a cloud provider, announcing Llama API, a developer platform for those building on its Llama models, in a move welcomed by analysts.

Zuckerberg has made overtures to Trump, visiting the White House several times this year in an effort to improve relations with the president, as lawmakers circle the AI industry.

Meta is also fighting a legal challenge from the US Federal Trade Commission, which alleges the company retains an illegal monopoly. Earlier this year, Zuckerberg failed in his attempt to negotiate a settlement in a bid to avoid going to trial.

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News Room April 30, 2025 April 30, 2025
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