Meta Platforms (NASDAQ: META) is another company in the category of the magnificent seven which has become one of the better performers of the year without anyone noticing. The shares of Meta have increased by 19.1% in the last six months although other tech giants such as Apple and Tesla have experienced a decline. This increase has greatly been attributed to the fact that the company made a major move into artificial intelligence. CEO Mark Zuckerberg has obviously taken the pressure off the floundering metaverse segment and focused it on AI and the payoff is beginning to come in.
As of the originally posted date of 2025, Q1 of the year saw continued good results. Revenue increased by 16% compared to the previous year to reach 42.31 billion USD and the earnings per share were up by 37% and reached 6.43 USD, exceeding the expectations of Wall Street. Much of this is attributed to the new AI functions being deployed on the encounters of Meta as well as Facebook, Instagram, Messenger, and WhatsApp. These supplements are increasing user interaction and advertisement earnings. As an example, there are over 3 billion monthly users of an app like WhatsApp now.
On the other hand, reality labs is the department involved, as Meta works on its metaverse plans, clocking in at an operating loss of $4.21 billion during the first quarter. Even the segment revenue has declined indicating that AI has become the primary growth strategy of the company. It is important to note that Meta has increased its 2025 capital expenditure goal to up to $72 billion with much of it already earmarked for AI and data center infrastructure expenditures. This is an indication of long-term commitment and it is simultaneously subject to some risk in case the economy becomes weak.
Most analysts (60) on Wall Street have advised a buy. Price expectations widely ranging between $525 and $935 indicate a lack of certainty in terms of economy and returns of the resulting investments in AI. Nevertheless, with healthy profits and intelligent direction Meta presents an upbeat future. As Threads expands and there are great sales of smart products such as AI powered Ray-Ban glasses, Meta seems to be showing momentum. Assuming that AI will be profitable, the stock might set new records but the path may be rough.
