Meta quarterly profit climbs to US$16.6b despite big cloud spending
SAN FRANCISCO, May 1 — Tech giant Meta on Wednesday reported quarterly profits that were well above expectations, brushing aside market worries that its heavy investments in cloud computing and artificial intelligence would hamper growth.
The company reported a US$16.6 billion (RM71.6 billion) profit in the first three months of the year on revenue of US$42.3 billion, with business spending on ads remaining strong.
Shares in the social media giant — which owns Facebook, Instagram and WhatsApp — rose more than four per cent in after-market trades.
'We've had a strong start to an important year, our community continues to grow and our business is performing very well,' said Meta chief executive Mark Zuckerberg.
'We're making good progress on AI glasses and Meta AI, which now has almost one billion monthly actives.'
Meta this week unveiled its first standalone AI assistant app, challenging ChatGPT by giving users a direct path to its generative AI models.
Zuckerberg said in an Instagram video post that the app 'is designed to be your personal AI' and could be primarily accessed through voice conversations, with the interactions personalised to the individual user.
Meta is putting AI to work throughout its platforms, from creating and targeting ads to recommending content for users, according to Zuckerberg.
Defending the family
The solid performance comes as Meta defends its group of apps in a US antitrust case that could end with the tech firm ordered to spin off messaging service WhatsApp and photo sharing platform Instagram.
Some 3.43 billion people use apps in the Meta family every day, according to the company.
Zuckerberg has denied in court that his company bought Instagram and WhatsApp to neutralize competitive threats, as alleged by the Federal Trade Commission.
The earnings also come in the wake of significant shifts in Meta's content policies that are apparently intended to endear the company to US President Donald Trump, including the termination of its US fact-checking operation on Facebook.
'Meta robust earnings show that the company's advertising business remained healthy in Q1, proof that the controversial ending of its fact-checking program hasn't done much to deter advertisers,' said Emarketer analyst Minda Smiley.
'But investors and onlookers alike will be much more concerned with what's to come in Q2 and beyond, considering the wildly different economic environment the company now operates in because of Trump's tariffs.'
Analysts are keen to see whether the hefty US tariffs will prompt businesses to cut their online advertising budgets, thereby weakening Meta's main source of revenue.
Meta's first-quarter earnings came 'before the economic turmoil really kicked in and before the seesaw of the tariffs began,' and China-based advertisers like Temu and Shein cut ad spending, said Sonata Insights chief analyst Debra Aho Williamson.
'If Meta can continue to improve its AI-driven ad performance and targeting tools, it will be able to withstand any shortfall in revenue from China advertisers,' Williamson said.
Meta has laid out plans for massive infrastructure investments, with expected capital expenditures of US$64-72 billion for 2025, primarily supporting AI initiatives.
'The pace of progress across the industry and the opportunities ahead for us are staggering,' Zuckerberg said on an earnings call.
'We are accelerating some of our efforts to bring capacity online more quickly this year, as well as some longer term projects, and that has increased our planned investment for this year.'
While Meta's stock has performed strongly, the company faces both regulatory challenges and emerging competition.
The rise of Chinese startup DeepSeek's more economical AI model has reportedly prompted Meta to establish war rooms to study and potentially adapt the innovations for its own Llama AI models. — AFP
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malaysian Reserve
4 hours ago
- Malaysian Reserve
Unifor members at DHL Express Canada locked out after refusing to accept concessions
TORONTO, June 8, 2025 /CNW/ – Unifor members at DHL Express Canada were locked out by their employer after midnight on June 8, after the workers refused to accept concessions put forth by the company. 'We will not stand by while DHL locks out our members across the country and threatens to use scabs in an attempt to pressure our members to take concessions. Our members deserve respect and a fair contract,' said Unifor National President Lana Payne. 'We expect DHL to abide by the law on the books, passed unanimously by Parliament, which will come fully into force later this month. A law that bans the use of replacement works in a legal dispute. It is reprehensible that this company thinks they can bust our members' right to fair and free collective bargaining by using scab labour.' Some concessions the company is pushing include change driver pay system resulting in a loss of money, driving 100 km. to get to their routes or pick up their freight with no compensation. Other concessions involve proposing language that will allow the company to refuse accommodation, laying off employees, and proposing reducing drivers' daily guarantee. The company has also rerouted pickups across the whole country while reducing pay for owner operators. Hours before the deadline, the employer added numerous new proposals and concessions. The union's bargaining priorities remain improving working conditions—including access to clean and secure washrooms—securing fair wages, addressing surveillance and automation issues and recognition and respect for workers. The company filed its intention to lock out workers on June 4 – four days before the deadline to reach an agreement. 'By imposing a lockout, DHL is choosing confrontation over negotiation,' said Unifor Quebec Director Daniel Cloutier. 'This is a serious decision that deprives dedicated workers of their livelihoods. But let's be clear: our members will not be intimidated. They are united, standing strong, and determined to obtain the respect and working conditions they deserve.' Unifor DHL members voted 97% for strike action if necessary last month. Unifor represents over 2,100 DHL Express Canada workers who as truck drivers, couriers, warehouse and clerical workers across Canada, at Locals 114 in British Columbia, 700 in Quebec, 755 in Manitoba and Saskatchewan, 4005 in Nova Scotia, 4457 in Ontario and members in DHL Alberta. Unifor's legal department sent a letter to DHL, cautioning them of hiring scabs –– as anti-scab legislation, which the union campaigned diligently for, is set to come in on June 20. The union firmly believes the timing of the lockout notice is tied to the incoming legislation. The German-based parcel delivery giant's annual profit is roughly $3.3 billion Euro ($4.6 billion CDN) and revenue from its significant and growing North American enterprise is worth approximately ($9.4 billion CDN). And yet, the employer is demanding changes and concessions to working conditions that will negatively affect the pay of Unifor DHL members. Customers in Canada will likely be affected if they use other couriers, including UPS and Loomis, because of integrated contracts with other freight companies. DHL Express Canada has 50,000 customers, including Temu, SHEIN, Lululemon and Siemens Canada. The labour dispute could also potentially cause major disruptions to the Canadian Grand Prix in Montreal, June 13 to 15, due to DHL's responsibility for transporting Formula One vehicles. Unifor is Canada's largest union in the private sector, representing 320,000 workers in every major area of the economy. The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future.
New Straits Times
5 hours ago
- New Straits Times
China's rare earth dominance reshapes trade war battlefield
China has signalled for more than 15 years that it was looking to wea-ponise areas of the global supply chain, a strategy modelled on longstanding American export controls Beijing views as aimed at stalling its rise. The scramble in recent weeks to secure export licences for rare earths, capped by Thursday's telephone call between US and Chinese leaders Donald Trump and Xi Jinping, shows China has devised a better, more precisely targeted weapon for trade war. Industry executives and analysts say while China is showing signs of approving more exports of the key elements, it will not dismantle its new system. Modelled on the United States' own, Beijing's export licence system gives it unprecedented insight into supplier chokepoints in areas ranging from motors for electric vehicles to flight-control systems for guided missiles. "China originally took inspiration for these export control methods from the comprehensive US sanctions regime," said Zhu Junwei, a scholar at the Grandview Institution, a Beijing-based think tank focused on international relations. "China has been trying to build its own export control systems since then, to be used as a last resort." After Thursday's call, Trump said both leaders had been "straightening out some of the points, having to do mostly with rare earth magnets and some other things". He did not say whether China committed to speeding up licences for exports of rare earth magnets, after Washington curbed exports of chip design software and jet engines to Beijing in response to its perceived slow-rolling on licences. China holds a near-monopoly on rare earth magnets, a crucial component in EV motors. In April, it added some of the most sophisticated types to an export control list in its trade war with the US, forcing all exporters to apply to Beijing for licences. That put a once-obscure department of China's commerce ministry, with a staff of about 60, in charge of a chokepoint for global manufacturing. Several European auto suppliers shut down production lines last week after running out of supplies. While China's April curbs coincided with a broader package of retaliation against Washington's tariffs, the measures apply globally. "Beijing has a degree of plausible deniability — no one can prove China is doing this on purpose," said Noah Barkin, senior adviser at Rhodium Group, a China-focused US think tank. "But the rate of approvals is a pretty clear signal that China is sending a message, exerting pressure to prevent trade negotiations with the US leading to additional technology control." Even if the pace of export approvals quickens as Trump suggested, the new system gives Beijing unprecedented glimpses of how companies in a supply chain deploy the rare earths it processes, European and US executives have warned. Other governments are denied that insight because of the complexity of supply chain operations. For example, hundreds of Japanese suppliers are believed to need China to approve export licences for rare earth magnets in coming weeks to avert production disruptions, said a person who has lobbied on their behalf with Beijing. "It's sharpening China's scal-pel," said a US-based executive at a company seeking to piece together an alternative supply chain.. As early as 1992, former Chinese leader Deng Xiaoping was quoted as saying, "The Middle East has oil, China has rare earths". Beijing's landmark 2020 Export Control Law broadened curbs to cover any items affecting national security — from critical goods and materials to technology and data. China has since built its own sanctions power while pouring the equivalent of billions of dollars into developing work-arounds in response to US policies. In 2022, the US put sweeping curbs on sales of advanced semiconductor chips and tools to China over concerns the technology could advance Beijing's military power. But the move failed to halt China's development of advanced chips and artificial intelligence, analysts have said. Beijing punched back a year later by introducing export licences for gallium and germanium, and some graphite products. Exports to the US of the two critical minerals, along with germanium, were banned last December. In February, China restricted exports of five more metals key to the defence and clean energy industries.
The Star
7 hours ago
- The Star
US cuts Chinese medicine purchases threefold in April, according to customs data
MOSCOW, June 8 (Bernama-Sputnik/RIA Novosti) -- The United States drastically cut down the purchase of Chinese medicines in April, with imports in monetary terms showing a threefold drop to US$173.6 million compared to March, RIA Novosti calculations based on US customs data revealed on Sunday. The shipments of Iodine drugs made up the largest share of supplies in April, accounting for 75 per cent of Chinese medicine exports to the US. Additionally, antibiotics (9.5 per cent) and hormonal products (4.4 per cent ) also accounted for significant volumes of shipments in money. The major sellers of drugs to the US in April were India (19 per cent of US imports), Ireland (14 per cent) and Switzerland (13 per cent). China, with a 12 per cent share, ranked 12th, along with Hungary, Denmark and Japan. China and the US are now essentially in a state of trade war, which erupted after US President Donald Trump imposed a 10 per cent tariffs on imports of all Chinese goods in February, raising it to 20 per cent in March. After several reciprocal measures, the US tariff against Chinese goods reached 145 per cent, and the rate for US suppliers to China hit 125 per cent. However, already in mid-May, China and the US mutually reduced trade tariffs to 10 per cent, from May 14 for 90 days. Consequently, China started imposing a 10 per cent tariff on US imports, while the US levied a 30 per cent tariff on Chinese products as the 20 per cent "fentanyl" tariff remained in effect. In late spring, the sides accused each other of violating preliminary agreements. - Bernama-Sputnik-RIA Novosti
