Meta Stock Jumps As Q1 Beat, Capex Boost Warms Investor Hearts: Retail Upbeat As CFO Touts Resilience Amid Macro Jitters

Meta Platforms, Inc. (META) shares climbed sharply in Wednesday's post-market session after the social media giant announced better-than-expected quarterly results. 

The Mark Zuckerberg-led company reported earnings per share (EPS) of $6.43 for the first quarter of the fiscal year 2025, up 37% year over year (YoY) and exceeding the Finchat-compiled consensus estimate of $5.21.

Revenue climbed 16% YoY to $42.31 billion versus the $41.36-billion consensus estimate and the guidance of $39.5 billion to $41.8 billion.

Currency impact trimmed three percentage points from growth, while advertising accounted for about 98% of the total revenue.

Cost and expenses increased 9%, markedly slower than the topline growth, reflecting primarily lower legal-related costs.

CEO Zuckerberg said, "We've had a strong start to an important year, our community continues to grow and our business is performing very well."

"We're making good progress on AI [artificial intelligence] glasses and Meta AI, which now has almost 1 billion monthly actives."

Among operational metrics, family daily active people (DAP) climbed 6% YoY to 343 billion following the fourth quarter's 5% growth. Ad impressions grew by 5%, and the average price per ad increased by 10%.

Meta ended the quarter with a cash position of $70.23 billion.

The company guided second-quarter revenue in the range of $42.5 billion to $45.5 billion, factoring in a one-percentage-point benefit from the exchange rate. The guidance aligned with the consensus estimate of $43.81 billion. 

CFO Susan Li said on a call with the analysts that the $3 billion range reflected the potentially wide range of outcomes amid the uncertainty about macroeconomic conditions, according to a Koyfin transcript.

She acknowledged some reduced ad spending in the U.S., and from Asia-based e-commerce exporters in anticipation of the de minimis exemption going away on May 2.

Meta raised its capital expenditure estimate for the year to $64 billion-$72 billion from $60 billion-$65 billion, citing increased data center investments to further its AI efforts and higher infrastructure hardware costs.

The company warned that the European Commission's recent decision that its subscription for no ad model was not compliant with the bloc's Digital Markets Act could materially worsen user experience, impacting its revenue from the region starting with the third quarter. It also said it would appeal the decision.

Outlining the priorities on the earnings call, Zuckerberg said the focus would be on improved advertising, more engaging experiences, business messaging, Meta AI, and AI devices.

The executive also said Meta is well-positioned to navigate the macroeconomic uncertainty.

On Stocktwits, retail users were 'extremely bullish' (86/100) toward Meta stock by late Wednesday, and the retail chatter was 'high.'

A bullish watcher called Meta stock "one of my lifetime holds," and said it would gain further momentum following price target upgrades.

Another user expects Meta and other big techs to go on a buyback spree to capitalize on the depressed prices.

Meta stock ended Wednesday's session down 0.98% at $549 but climbed 5.36% after-hours.

The stock is down 6% for the year-to-date period.

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