Meta jumps on resilient ad sales, plans to navigate tariffs

(Bloomberg/Riley Griffin and Kurt Wagner) — Meta Platforms Inc. shares jumped after the company’s advertising sales quelled Wall Street concerns about the impact of the Trump administration’s trade war, with first-quarter revenue beating expectations.

The maker of Facebook and Instagram reported $42.3 billion in first-quarter sales, the company said in a statement Wednesday. That topped analysts’ estimates for $41.4 billion for the quarter ended March 31. Meta also said current-quarter revenue will be in line with analysts’ expectations, and that it’s responding to the trade war by rethinking suppliers and projecting higher costs for infrastructure.

“We’re well positioned to navigate the macroeconomic uncertainty,” Chief Executive Officer Mark Zuckerberg told investors on the company’s earnings call.

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Meta needs its advertising business, which makes up 98% of the company’s revenue, to continue growing in order to fund an expensive expansion in artificial intelligence. So far, AI is helping improve ad targeting and personalization of the content people see on social networks. Meta is also investing heavily to keep pace with rivals like OpenAI and Alphabet Inc.’s Google in developing large language models and chatbots.

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Meta now expects to spend $64 billion to $72 billion, up from its prior outlook of $60 billion to $65 billion, attributing some of its spending to a wave of tariffs imposed by the Trump administration.

“The higher cost we expect to incur for infrastructure hardware this year really comes from suppliers who source from countries around the world and there’s just a lot of uncertainty around this given the ongoing trade discussions,” Chief Financial Officer Susan Li said on the call with investors. Meta is working on mitigating that impact by “optimizing our supply chain.”

Meta’s stock rose as much as 8% after markets opened in New York on Thursday. Shares of companies that make gear used in AI computing, including Nvidia Corp., also rallied. Meta’s stock was down more than 6% year-to-date before the company reported earnings, but has still performed better than most of America’s biggest technology companies amid a market selloff spurred by tariffs.

“While many companies have not been providing forward guidance amid tariff concerns and an uncertain macro environment, Meta did — a bullish sign,” said Andrew Rocco, a stock strategist at Zacks Investment Research. Rocco pointed not just to the company’s second-quarter forecast, but also to the increase in the company’s expected capital expenditures, which he said was a positive look for the broader AI sector.

Meta reported first-quarter earnings per share of $6.43, up 37% from a year prior and surpassing the average analyst estimate of $5.25. The company’s social apps now reach 3.4 billion people around the world each day.

In January, Zuckerberg signaled heavy AI investment ahead, saying the company would ultimately spend hundreds of billions of dollars on the technology. Those plans appear to be on track despite global economic turmoil, and even as Chinese AI companies figure out how to do more with less. Earlier this year, a Chinese company called DeepSeek released a competitive model that it said used cheaper and less powerful chips.

Meta’s quarterly results come a day after the company hosted its inaugural LlamaCon conference, which was focused on its AI development efforts. The company’s Llama models have been downloaded about 1.2 billion times, Chief Product Officer Chris Cox said at Meta’s Menlo Park, California headquarters.

In an effort to further extend the technology’s reach, Meta also unveiled a new standalone AI app, called Meta AI, which it hopes will compete with rivals like OpenAI’s ChatGPT and give users an easier way to access the product without turning to Facebook, Instagram or WhatsApp.

WhatsApp, which is currently the most common place for users to access Meta AI, isn’t the dominant messaging app in the US, Zuckerberg said on the Wednesday earnings call.

“So I think that the Meta AI app as a standalone is going to be particularly important in the United States to establishing leadership,” he said.

(Updates with share move in the first and seventh paragraphs.)

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