From Nasdaq: 2025-05-04 07:30:00

Meta Platforms (NASDAQ: META) faced concerns over reduced ad spending from Chinese e-commerce companies like Temu and Shein, which accounted for 11% of revenue last year. Temu’s Facebook spending dropped from over $1 million a day to zero due to U.S.-China trade tensions and tariff changes. However, Meta’s Q1 results exceeded expectations, with revenue up 16% to $42.31 billion, driven by AI investments.

Meta reassured investors with strong guidance for the year, noting redirected ad spending from China-based e-commerce companies and increased investment in AI. Ad revenue rose 16% to $41.4 billion, with growth in ad impressions and price per ad. Meta’s user engagement increased with AI-powered recommendations, leading to more time spent on Facebook and Instagram.

Despite challenges from the U.S.-China trade war, Meta’s advertising revenue growth is largely driven by AI investments. The company’s user base continues to grow, with Family DAP reaching 3.43 billion in March. Meta’s forecasted Q2 revenue is between $42.5 billion and $45.5 billion, reflecting resilience amid economic uncertainty and increased capital expenditures to support AI efforts.

Meta Platforms stock, currently down over 20% from highs, offers an attractive long-term investment opportunity. With a forward P/E ratio of around 23 times based on 2025 estimates, Meta’s strong revenue growth and AI focus position it for future success. Consider Meta as a compelling buy at current levels for potential returns in the long run.



Read more at Nasdaq: Meta Platforms: AI Continues to Drive Revenue, but Is the Stock a Buy?