Meta Platforms Reports Strong Earnings, Increases AI Spending Plans

Meta Platforms reported strong first-quarter results, with sales and earnings surpassing Wall Street expectations, driven by user growth and significant advances in AI-powered advertising. The company increased its full-year capital expenditure outlook to as much as $72 billion, signaling a major commitment to AI infrastructure and future growth despite potential margin pressures from rising costs and global supply chain disruptions. Meta’s CEO highlighted how AI improvements have boosted ad targeting, user engagement, and time spent on apps like Facebook, Instagram, and Threads. While analysts raised their price targets in response to Meta's tangible gains from AI, management offered cautious revenue guidance for the next quarter, citing macroeconomic uncertainty and regulatory challenges, particularly in Europe. Losses in Meta's Reality Labs division also widened, reflecting ongoing investment in virtual reality and metaverse initiatives. Overall, investors and analysts remain optimistic about Meta’s strategy, expecting AI investments to drive long-term market share gains and ad revenue growth.