Meta Platforms (NASDAQ: META) posted stronger-than-expected first-quarter results on Wednesday, easing market concerns over a potential advertising slowdown tied to global trade tensions. The company reported earnings per share (EPS) of $6.43 on revenue of $42.3 billion, comfortably beating Wall Street’s estimates of $5.25 EPS and $41.3 billion in revenue, according to Bloomberg consensus.
Meta’s advertising revenue came in at $41.39 billion, above expectations of $40.5 billion, while its Reality Labs unit posted a $4.21 billion operating loss, reflecting continued investment in the metaverse and hardware initiatives.
The company’s stock rose over 4% in after-hours trading, signaling investor relief and optimism despite macroeconomic and regulatory headwinds. While Meta stock is down over 7% year-to-date, it remains up more than 25% over the past 12 months.
Upbeat Q2 Outlook Defies Tariff-Driven Ad Concerns
Meta projected second-quarter revenue between $42.5 billion and $45.5 billion, surpassing the Street’s $44 billion estimate. The upbeat forecast comes amid persistent fears that U.S.-China trade tensions, including newly enacted tariffs, could reduce ad spending — especially by China-based advertisers, who contribute more than 10% of Meta’s advertising revenue, according to Jefferies analyst Brent Thill.
“Despite geopolitical uncertainty, Meta continues to show advertising strength and engagement resilience across its platforms,” said Jessica Redding, senior tech analyst at Kiro Capital. “They’re outperforming peers even without a cloud business to offset volatility.”
Capex Increase Signals Confidence in Growth Pipeline
In a notable move, Meta raised its full-year capital expenditures forecast to between $64 billion and $72 billion, up from a prior range of $60 billion to $65 billion. The increased investment suggests Meta is doubling down on AI infrastructure, data centers, and product innovation, despite global economic volatility.
CEO Mark Zuckerberg has signaled that AI development and monetization will be central to the company’s growth strategy, as well as the continued buildout of mixed-reality and virtual interaction technologies under its Reality Labs division.
FTC Legal Battle Intensifies as Meta Resists Breakup
Meta’s strong financial performance comes as it faces mounting legal pressure from the Federal Trade Commission (FTC), which is seeking to force the company to divest Instagram and WhatsApp. The agency alleges Meta engaged in anti-competitive conduct, describing its historic acquisitions as part of a “buy-or-bury” strategy.
According to The Wall Street Journal, Zuckerberg recently offered to settle the case for $1 billion, after an initial $450 million offer was rejected. The FTC, however, is reportedly holding firm with a demand closer to $18 billion. Meta declined to comment on the specifics of the settlement talks.
Political Ties Draw Additional Scrutiny
Meta’s legal and regulatory troubles are further complicated by Zuckerberg’s growing proximity to President Donald Trump. The CEO has reportedly met with Trump on multiple occasions in recent months and attended his January inauguration. Meta also donated $1 million to Trump’s inaugural fund, and reached a $25 million settlement with the former president over his 2021 platform ban.
While some analysts suggest the relationship could yield regulatory leniency or support for AI investments, others warn it risks long-term reputational damage, especially among younger users and international markets.
What’s Next: Can Meta Sustain Its Momentum?
Despite a challenging macro backdrop, Meta’s strong Q1 beat, raised Q2 guidance, and disciplined cost structureposition it well among large-cap tech peers. However, regulatory outcomes, tariff impacts, and political entanglements remain key variables for the months ahead.
With Meta ramping capital spending and expanding its AI infrastructure while defending its core platform business in court, investors will closely watch user engagement trends, ad pricing dynamics, and FTC case developments through the second quarter.
