"Meta Platforms ( NASDAQ:META ) started off 2025 strong, posting 16% revenue growth in the first quarter to $42.3 billion. By the third quarter, revenue surged 26% year-over-year to $51.2 billion, driven by robust advertising demand. However, doubts emerged as Meta ramped up artificial intelligence (AI) investments, with capital expenditures expected to reach $70 billion to $72 billion for the year."
"AI-powered recommendation algorithms have improved ad relevance, leading to a 10% year-over-year increase in average price per ad in the third quarter. This has driven double-digit gains in conversion rates and pricing power. Tools like Advantage+ campaigns, which automate targeting and creative generation, have generated over $60 billion in annual run rate, with advertisers seeing a $4.52 return per dollar spent."
Meta Platforms grew revenue 16% to $42.3 billion in Q1 2025 and 26% year-over-year to $51.2 billion by Q3, fueled by strong advertising demand. The company increased artificial intelligence investments, projecting capital expenditures of $70–$72 billion for the year and issuing $30 billion in bonds after free cash flow of $58.8 billion proved insufficient. Investor concerns arose from Reality Labs' prior losses and rising spending, stalling a prior stock rally. AI improvements boosted ad relevance, raising average price per ad and conversion rates. Advantage+ campaigns and new WhatsApp monetization features further expanded revenue drivers.
Read at 24/7 Wall St.
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