ii view: Meta hurt by Iran and Russia

Meta’s Mark Zuckerberg (far left), Amazon founder Jeff Bezos, Google’s Sundar Pichai and Tesla’s Elon Musk pictured in Washington. Photo: Julia Demaree Nikhinson/POOL/AFP via Getty Images.

First-quarter results to 31 March

• Revenue up 33% to $56.3 billion (£41.7 billion)
• Earnings up 14% to $7.31 per share
• Cash and equivalents held of $81.2 billion, unchanged from Q4

Guidance:

• Expects first-quarter revenue of $58-61 billion
• Now expects full-year 2026 capital expenditure of $125-145 billion, up from a previous $115-135 billion estimate

Chief Executive Mark Zuckerberg said:

“We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs.

“We’re on track to deliver personal super-intelligence to billions of people.”

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ii round-up:

Increasing use of AI automated marketing to users helped Meta Platforms Inc Class A (NASDAQ:META) report its fastest revenue growth since 2021, although events in Iran and Russia have affected social media user numbers. 

First-quarter revenue to late March rose by a third to $56.3 billion (£41.7 billion), pushing adjusted earnings up 14% from a year ago to $7.31 per share. Daily Active People, or users of Meta apps like Facebook and WhatsApp of 3.56 billion, rose 4% year-over-year but missed analyst expectations of 3.62 billion. 

Shares in the Nasdaq 100 company fell 7% in post results trading to a three-week low, having come into these latest results little changed so far in 2026. Both the Nasdaq 100 index and shares in Google owner Alphabet Inc Class A (NASDAQ:GOOGL) are each up by close to a tenth year-to-date. 

Meta operates across the two businesses of Apps including Instagram and Messenger as well as Virtual Reality (VR) gaming and metaverse interests as part of its reality labs division.

Capital expenditure, or investment, largely on AI infrastructure such as data centres, is now expected to come in at $125-145 billion for 2026. That’s up from a previous estimate of $115-135 billion. Meta invested $72.5 billion last year.

Revenues of $58-61 billion are forecast for the second quarter to late June, broadly in line with Wall Street estimates of $59.5 billion and compared with last year’s $47.5 billion.

ii view:

Started in 2004 by Mark Zuckerberg, Meta sales hit $200 billion last year, up 24% from 2024. Group headcount totals 77,986, down from 78,865 at the end of the fourth quarter. Meta’s home US market generated most sales in 2025 at 37%. That was followed by Asia Pacific at 27%, Europe 23%, Canada 2%, and the rest of the world 11%. 

For investors, increasing investments made by the company in AI are not guaranteed to generate higher profits in the future. Legal cases including allegations that Meta misled consumers about harmful products could now result in material costs. A move by Australia to impose age restrictions on the use of social media may be followed by other countries, while government concerns globally regarding possible misinformation spread by social media have not gone away.

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To the upside, Meta is pushing the use of its own AI tech to help tailor and target advertising for its customers. Meta’s current strong positioning in 3D, or Virtual Reality gaming and glass wear could be significantly enhanced given likely enhancements from AI. Group cash and equivalents held of $81.2 billion suggests a robust balance sheet, while the previous commencement of a dividend payment and estimated yield of 0.3% could increase its shareholder base to include those seeking a progressive annual payouts.

In all, and while risks have arguably increased, a consensus analyst estimate of fair value above $825 appears to point to continued hope on Wall Street about long-term prospects for Meta.

Positives

• AI helping the targeting of appropriate adverts to users
• Reducing staff headcount under moves to cut costs

Negatives

• Uncertain economic outlook
• A series of scandals have previously impacted

The average rating of stock market analysts:

Buy