Meta, the social networking giant led by Mark Zuckerberg, has increased its capital expenditure plans for at least the third consecutive quarter, despite rival Microsoft easing up on data center spending due to economic uncertainty.
The company now expects its 2025 capital expenditure to range between $64 billion and $72 billion, a significant increase from the previous forecast of $60 billion to $65 billion. Meta’s annual capex in 2023 was just $28 billion.
Zuckerberg emphasized the importance of investing in AI research and development, aiming for “full general intelligence.” He stated that the company is accelerating some efforts to bring capacity online quickly and investing in longer-term projects to add flexibility in the coming years.
Meta’s stock surged over 5% after-hours trading following the announcement of quarterly earnings results that beat Wall Street expectations. The company expects Q2 revenue to range between $42.5 billion and $45.5 billion, representing year-on-year growth of 9-16%.
The increase in capital expenditure was partly due to tariffs imposed by the Trump administration on key components in data centers, which Meta CFO Susan Li attributed to suppliers from around the world. The company is trying to mitigate cost increases by optimizing its supply chain.
Despite economic uncertainty, Meta’s advertising business remains strong, driving a 16% revenue increase in the first quarter. The company also reported higher earnings per share than expected, with $6.43 beating Wall Street’s target of $5.22.
Source: https://fortune.com/article/meta-q1-earnings-revenue-profit-beat-ai-capex-raise