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Meta Platforms (META) demonstrated exceptional performance in the first quarter of 2025, reporting revenue of $42.31 billion, marking a 16% year-over-year growth and surpassing analyst expectations. The company's earnings per share reached $6.43, significantly exceeding Wall Street's forecast of $5.22, while achieving a substantial profit of $16.64 billion.
The earnings beat triggered a 5.3% surge in Meta's stock price, pushing it above $578 in after-hours trading. Overhead, META faces potential resistance from its year-to-date breakeven point around $585, along with its 50-day moving average at $588.
Inside Meta’s Q1 Earnings Report
Meta's advertising business showed remarkable resilience, with ad impressions increasing by 5% year-over-year and average price per ad rising by 10%. User engagement metrics remained robust, with daily active people across Meta's family of apps reaching 3.43 billion in March 2025, representing a 6% year-over-year increase. The company's operating margin improved to 41.5% from 37.9% in the same quarter last year, demonstrating effective cost management and operational efficiency.
Looking ahead, Meta provided optimistic guidance for Q2 2025, projecting revenue between $42.5 billion and $45.5 billion, while simultaneously lowering its total expenses forecast for the year to $113-118 billion.
The social media giant increased its capital expenditure outlook for 2025 to $64-72 billion from the previous $60-65 billion range, reflecting expanded investments in artificial intelligence (AI) infrastructure, including the recent launch of Meta AI and Llama 4 series of AI models. The metaverse-focused Reality Labs unit booked a Q1 operating loss of $4.2 billion, while reporting only $412 million in sales.
‘Strong Buy’ Meta Stock Still Faces Risks
META stock is rated a “Strong Buy,” on average, by the 53 analysts in coverage, but the company faces some challenges. Chief among those is the ongoing FTC antitrust trial that could force divestiture of key assets like Instagram and WhatsApp, although investor sentiment suggests such a break-up might actually unlock greater shareholder value. Separately, Meta faces potential headwinds from European regulatory challenges related to its subscription model.
This article was generated with the support of AI and reviewed by an editor. On the date of publication, the editor did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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