San Francisco (United States) (AFP) – Meta on Wednesday reported quarterly earnings that topped market expectations, as revenue grew along with investments in artificial intelligence. The parent of Facebook and Instagram said it made a profit of $22.8 billion on revenue of nearly $60 billion in the recently ended quarter, adding it could take in as much as $56.5 billion in the current quarter. “We had strong business performance in 2025,” Meta co-founder and chief executive Mark Zuckerberg said in an earnings release.
Meta shares rose more than 8 percent in after-market trades. Some 3.58 billion people used apps owned by Meta daily in the quarter, which are being enhanced with the help of AI, according to the social networking giant. Meanwhile, costs tallied $35.15 billion, an increase of 40 percent from the same period a year earlier, the earnings report noted. “Zuckerberg is clearly going all-in on AI, and it wouldn’t be surprising to see the share reaction cool as investors absorb those aggressive investment plans,” said Hargreaves Lansdown senior equity analyst Matt Britzman. “Even so, Meta is assembling one of the largest AI compute clusters outside the cloud giants, all aimed at strengthening its family of apps.”
Capital expenses, including infrastructure such as data centers to power AI, were $22.14 billion in the quarter, according to the company. Meta expects to spend more than $100 billion this fiscal year, driven by increased investment in Meta Superintelligence Labs and its core business. “I’m looking forward to advancing personal superintelligence for people around the world in 2026,” Zuckerberg said.
Zuckerberg has predicted that AI-infused smart glasses will be the “next major computing platform,” eventually replacing the smartphone. But Reality Labs — Meta’s virtual and augmented reality unit — has consistently posted big losses. Meta is locked in a bitter rivalry with other tech behemoths racing to invest heavily in AI, aiming to ensure the technology benefits society and generates profits in the not-so-distant future. Most analysts believe Meta will make the investment pay off by improving advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.
The earnings report came as a landmark trial accusing Meta of being among tech firms addicting young people to social media gets underway in Los Angeles. “Paired with momentum behind classroom cell phone bans and a broader push to regulate social media usage among kids and teens, it’s clear that Meta and its rivals have hit a watershed moment that could end up having massive implications for their businesses,” said Emarketer senior analyst Minda Smiley. Meta is monitoring legal and regulatory headwinds in Europe and the United States that could take a toll on its business, chief financial officer Susan Li said on an earnings call.
“For example, we continue to see scrutiny on youth-related issues and have a number of trials scheduled for this year in the US, which may ultimately result in a material loss,” Li warned. The case being heard in California state court is being called a “bellwether” proceeding because its outcome could set the tone for a tidal wave of similar litigation across the United States. Snap and TikTok-parent ByteDance have negotiated settlements to avoid the trial, leaving Meta and Alphabet’s YouTube as the remaining defendants. Zuckerberg is slated to be called as a witness during the trial.
The case focuses on allegations that a 19-year-old woman identified by the initials K.G.M. suffered severe mental harm because she was addicted to social media. Social media firms are accused in hundreds of lawsuits of addicting young users to content that has led to depression, eating disorders, psychiatric hospitalization, and even suicide. Internet titans have argued that they are shielded by Section 230 of the US Communications Decency Act, which frees them of responsibility for what social media users post. However, this case argues those firms are culpable for business models designed to hold people’s attention and to promote content that winds up harming their mental health. Meta and YouTube have rejected the allegations.
© 2024 AFP
