Home / Meta AI: Q1 Earnings, Revenue Forecast, Political Deals, Acquisitions & Expansion

Meta AI: Q1 Earnings, Revenue Forecast, Political Deals, Acquisitions & Expansion

By: Phoebe Bulotano
February 11, 2025

Meta’s AI push continued gaining ground in 2025. After a strong Q4 that included a 21% revenue increase and efforts to lessen dependence on Nvidia by exploring a deal with South Korean chipmaker FuriosaAI, the company is entering the next quarter with solid momentum.

Despite concerns around ad spending and tariffs, Meta’s Q1 results topped expectations, and its Q2 outlook signals more growth ahead.

Meta Beats Q1 Estimates With Strong Ad Revenue Growth

Meta reported Q1 revenue of $42.3 billion and earnings per share of $6.43, topping analyst projections. Advertising performance remained strong, helping drive a 35% increase in net income to $16.7 billion. Additionally, the family daily active people (DAP) was 3.4 billion on average for March 2025, showing an increase of 6%.

AI Spending Ramps Up as Meta Projects Higher Q2 Revenue

Meta expects Q2 revenue between $42.5 billion and $45.5 billion, slightly above Wall Street forecasts. The company raised its capital spending forecast for the year to support AI development, including updates to its Llama model and a standalone assistant app. Despite concerns tied to tariffs and regulatory pressure, Meta’s forward-looking guidance has kept investor sentiment positive.

Meta’s Stock Slips While FTC Case and Political Deals Add Pressure

Meta’s stock has dropped more than 7% since January but remains up over 25% compared to the same time last year. The company is facing a legal challenge from the Federal Trade Commission, which claims Meta has built a monopoly in personal social networking.

The FTC is pushing Meta to sell Instagram and WhatsApp, arguing that the purchases were meant to block competition. Reports say CEO Mark Zuckerberg offered to settle for $450 million. The FTC asked for $30 billion. Zuckerberg later raised the offer to $1 billion, but the FTC wouldn’t go below $18 billion.

Additionally, Zuckerberg has met with former President Trump several times. He attended the 2017 inauguration, and Meta donated $1 million to the inauguration fund. In January, Meta reportedly agreed to pay $25 million to settle a dispute related to Trump’s ban from its platforms after the Jan. 6 Capitol riot.

Meta Moves to Acquire FuriosaAI for AI Hardware Development

Meta is in advanced talks to acquire FuriosaAI, a South Korean AI chip company. This company specializes in high-performance computing for machine learning models. If this deal is finalized, Meta will take a major step in developing its own AI hardware.

By investing in custom AI chips, Meta aims to boost AI processing power across its platforms. This includes Facebook, Instagram, and the Meta AI assistant. Lastly, this move follows strategies by Google (TPU chips) and Amazon (Trainium & Inferentia chips), both of which developed in-house AI solutions.

If successful, the acquisition could help Meta cut operational costs and improve AI performance. It would also give Meta an advantage in AI-driven advertising and virtual assistant technologies. However, FuriosaAI must still prove its technology can compete with major AI chipmakers like Nvidia.

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Meta’s AI-Powered Ads Push Profits to Record Highs

Meta’s Q4 2024 earnings report highlights how AI-driven ads are driving financial success. The company posted $20.8 billion in net income, a 21% increase in revenue year-over-year. Moreover, this growth shows the impact of AI-powered ad optimization, which improves engagement and advertiser spending across Meta’s platforms.

The key reasons behind this financial growth include:

AI models that improve ad targeting and engagement.
Higher monetization through AI-driven ad personalization on Facebook, Instagram, and Threads.
Better AI-powered ad delivery, increasing advertiser returns on investment.

As Meta improves its AI-driven ad system, investors will watch whether this momentum continues. Further, the company’s AI-powered ads are now its most profitable business area. To maintain this growth, Meta is expected to increase its AI investments.

Meta’s AI Expansion Goes Beyond Advertising

Meta’s AI growth strategy is expanding beyond advertising. The company is now working on AI infrastructure and automation tools. Evidently, the FuriosaAI acquisition, combined with heavy investments in AI research, signals that AI will be Meta’s core business model moving forward.

Unlike past projects, such as the metaverse, Meta’s AI investments are delivering immediate financial benefits. These include higher ad efficiency and improved user engagement. As AI becomes a bigger part of Meta’s business, the company will likely pursue more acquisitions. This could further strengthen its position in AI-powered services.

What’s Next for Meta?

Despite legal battles and political scrutiny, Meta is leaning into bigger infrastructure investments and a raised capital spending forecast.

With Q1 results beating expectations and Q2 guidance coming in strong, investors are watching how Meta’s spending on AI models and hardware plays out against rising external pressure.

Stay informed on Meta’s AI earnings, revenue forecasts, expansion, acquisitions, and financial trends with Financial Daily Update—your go-to source for market insights.

Updated on May 6, 2025