Meta shares surge 10% on strong Q2 2025 earnings beat and bullish revenue forecast
Meta Platforms Inc. delivered a robust earnings report for the second quarter of 2025, significantly surpassing Wall Street expectations and fueling a more than 10% rally in its after-hours stock trading. The company's strong performance comes amid heavy investments in artificial intelligence infrastructure and talent acquisition, demonstrating that these expenditures have yet to impact its profitability or investor confidence.
Key financial highlights:
Earnings per Share (EPS): Meta posted $7.14 per share, well above the $5.88 analysts expected, representing a substantial 38% year-over-year increase.
Total Revenue: The company generated $47.52 billion in revenue, exceeding the $44.81 billion forecasted by Wall Street, marking a 22% increase compared to the previous year.
Advertising Revenue: Meta's core advertising business contributed $46.5 billion, outperforming expectations of $44.07 billion.
Reality Labs: Although still in the red, the Reality Labs division—which focuses on virtual and augmented reality—reported a loss of $4.49 billion, slightly less than the anticipated $4.8 billion.
Operating Margin: Improved to 43% from 38% in the same quarter last year.
Daily Active Users: Meta now reaches approximately 3.48 billion users, up by 210 million year-over-year.
Market Capitalization: Stands at roughly $1.76 trillion.
Meta also raised its guidance for the third quarter of 2025, projecting revenue between $47.5 billion and $50.5 billion, comfortably above analysts' consensus estimate of $46.23 billion. The midpoint of the forecast sits around $49 billion, about 6% higher than expectations, underscoring confidence in continued growth.
Investments and AI ambitions
The company continues to double down on artificial intelligence, with major capital investments and a strategic hiring spree that includes poaching top AI researchers from competitors. Capital expenditures for 2025 are now expected to be between $66 billion and $72 billion, up from a prior range of $64 billion to $72 billion. Meta's CFO, Susan Li, highlighted that infrastructure costs related to AI initiatives will remain a significant expense driver moving forward.
CEO Mark Zuckerberg emphasized AI's strategic role in Meta's future, describing ambitions to bring 'personal superintelligence' to nearly 3.5 billion users across Facebook, Instagram, WhatsApp, and Messenger. He envisions AI empowering individuals with tools to better shape their world, distinguishing Meta's vision from competitors that focus on centralized automation. Meta's solid earnings beat and optimistic forecast sent its shares soaring by more than 9% during after-hours trading. This marks the tenth consecutive quarter that Meta has exceeded earnings expectations and the twelfth quarter of revenue surpassing estimates, a streak that reflects strong execution despite competitive and technological challenges.
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