Meta reports first-quarter earnings after Wednesday’s close, with analysts watching ad growth, AI spending and the impact of higher energy costs.
Meta is expected to report its strongest quarterly revenue growth since 2021 when it releases first-quarter results after the market closes Wednesday, with Wall Street looking past a still-healthy advertising business to the cost and payoff of the company’s AI push.
Analysts polled by LSEG expect earnings of $6.79 per share on revenue of $55.45 billion. That revenue figure would be up 31% from $42.3 billion a year earlier, according to the estimates, reflecting continued strength in Meta’s core advertising business, which accounts for almost all of the company’s sales.
The report lands at a moment when investors are pressing large technology companies for more detail on artificial intelligence spending. Meta has been expanding its AI strategy under CEO Mark Zuckerberg after a shift last year that included a $14.3 billion investment in Scale AI and the hiring of Scale CEO Alexandr Wang to lead Meta Superintelligence Labs.
Earlier this month, Meta introduced Muse Spark, described in the source report as its first proprietary foundation model. The move sharpened investor attention on how Meta plans to compete with OpenAI, Anthropic and Google — and when, or whether, new AI tools can become meaningful revenue drivers beyond supporting the advertising engine.
The spending side of that strategy is equally important. Meta’s first-quarter capital expenditures are expected to reach $27.63 billion, according to StreetAccount. In January, the company forecast full-year capital spending of $115 billion to $135 billion, largely tied to its data-center buildout.
Those costs are now being viewed against a more volatile backdrop for energy prices. Meta and other major cloud and AI infrastructure companies are updating investors on spending plans for the first time since the U.S.-Iran war began in February, a conflict the source report said has contributed to a spike in oil prices and higher energy costs.
Meta has also been cutting jobs while investing heavily in AI infrastructure. The company said last week it is laying off about 10% of its workforce, or 8,000 employees, and will no longer hire for 6,000 open roles. Those moves follow earlier cuts this year in Reality Labs and other parts of the business, including Facebook, global operations and sales.
Reality Labs remains another pressure point. Analysts expect the virtual and augmented reality division to post a first-quarter operating loss of $4.82 billion on revenue of $488.8 million.
For investors, the immediate question is whether Meta’s advertising growth can continue to absorb heavy AI and metaverse-related spending — and whether Zuckerberg offers a clearer path from AI investment to revenue when the company reports after the bell.
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