Investing.com -- Meta Platforms delivered Wednesday better-than-expected first-quarter results and upbeat guidance that pointed to increased spending on artificial intelligence, cooling fears about slowing AI demand.
Meta Platforms Inc (NASDAQ:META) shares rose more than 6% in premarket trading Thursday.
For the three months ended Mar. 31, the company reported earnings of $6.43 a share on revenue of $42.31 billion. Analysts polled by Investing.com anticipated per-share income of $5.24 on revenue of $41.48B.
Meta’s ad revenue, excluding foreign exchange (FX) impact, grew 20% year-over-year, topping Street expectations by 3%.
Family daily active people, or DAP, rose 5% to 3.43 billion on average for March 2025, from a year earlier.
One of the highlights of the report was operating income, which came in at $17.6 billion, with a 41% margin—16% above consensus and the highest first-quarter operating margin in four years.
For the second quarter, the company guided for total revenue to be in the range of $42.5B to $45.5B, beating estimates for $43.81B.
Full-year 2025 (FY25) capital expenditures were expected in the range of $64B to $72B, up from its prior outlook of $60B to $65B, signaling that AI investment demand remains strong.
"While FY25 capex guidance was raised by $5.5B at the midpoint to $64-72B, we believe META is making the right investments to continue delivering superior performance for advertisers," Jefferies analysts led by Brent Thill said in a note. The brokerage lifted its META price target to $700 from $600.
Total expenses for 2025 were guided lower to a range of $113B to $118B, from a prior outlook of $114B to $119B.
Evercore analysts noted that while Meta faces significant macro uncertainties in 2025 and is pursuing an aggressive pace of capital investment, the company is “doing this from a clear position of strength.”
"At < 20x P/E, we view valuation as highly compelling," they added.
Yasin Ebrahim contributed to this report.