Profits are up, expectations are high, and Meta is spending like the future depends on it — because, in Zuckerberg’s world, it does.
Niharika Kulkarni/NurPhoto via Getty Images
Before Meta $META’s superintelligence ambitions can change the world, they had to pass the far less glamorous test of a quarterly earnings call. And the company did exactly that, turning in one of its most impressive quarters in years — silencing skeptics and continuing to affirm its dominance in the digital ad economy.
Revenue surged 22% year-over-year to $47.52 billion, crushing analyst expectations of around $44.8 billion. Profits weren’t just good, they were eye-popping: Earnings per share hit $7.14, well above forecasts of $5.88. Meta’s stock soared nearly 10% in after-hours trading as investors digested the results — and showed growing hunger for Meta’s moonshot AI buildout.
Behind the numbers lies a familiar story: Meta’s ad machine continues to roar. Advertising revenue rose over 20%, fueled by stronger ad prices (up around 9%) and increased volume from Meta’s Family of Apps (see: Facebook, Instagram, Threads, Messenger, and WhatsApp). The user base remains massive and sticky — daily active users grew around 6%, now totaling approximately 3.48 billion.
Advertising remains Meta’s cash‑cow — nearly 98% of quarterly revenue ($46.38 billion of Meta’s $47.55 billion in total revenue) — primed by AI tools such as Advantage+ and Andromeda boosting ad ROI. Meta has leaned into automation for small businesses and cross-platform ad optimization, and so far, the pitch is working. On the earnings call, chief financial officer Susan Li said nearly two million advertisers are using Meta’s video generation features, image animation, and video expansion, “and we’re seeing strong results with our text generation tools as we continue to add new features.”
But the story this quarter wasn’t about ad dollars. It was about where those dollars are going. “Now,” the company said in a release, “Meta is moving beyond 2D screens toward experiences that foster deeper connections and unlock new possibilities.”
The company has been spending like it is building a new internet — maybe because it is. Meta’s capital expenditures hit $17.01 billion this quarter, primarily for its “superintelligence” effort, including new data centers, Hyperion and Prometheus buildouts, and the kind of AI research that is supposed to take Meta from social platform to superintelligence pioneer. The company has made high‑profile hires such as Scale AI founder Alexandr Wang and has poached top talent from Meta’s rivals (with some truly outrageous pay packages that have been rumored to reach $1 billion). Zuckerberg has said that this wave of investment will “set the foundation for AI for the next decade.”
He said on the earnings call, “We’re building an elite, talent-dense team. I’ve spent a lot of time building this team this quarter.”
Meta’s clandestine “superintelligence” AI lab in Menlo Park, California, is Zuckerberg’s latest moonshot. He has personally been overseeing the recruiting — partially in group chats he named “Recruiting Party.” While Wall Street has expected marked AI progress, it has demanded signs of ROI beyond mere “engagement up” gibberish. And investors want to know if this latest venture is gearing up to be the future — or the balance‑sheet nightmare of tomorrow.
Because Meta’s ambitions aren’t just grand. They’re getting pricier, too. The company revised its full-year 2025 outlook to reflect narrower, but still hefty, spending plans. Total expenses are now expected to fall between $114 billion and $118 billion, a 20–24% jump from last year. Capital expenditures are projected at $66 billion to $72 billion — slightly tightened from previous guidance — and Meta signaled that 2026 won’t be any cheaper.
“We’ve had a strong quarter both in terms of our business and community. I’m excited to build personal superintelligence for everyone in the world,” Zuckerberg said in the earnings release. On the post-release call, he said he thinks that “developing superintelligence is now in sight.”
Meanwhile, Reality Labs — Meta’s metaverse division — continues to bleed cash: The unit lost $4.53 billion in the second quarter, with weak headset sales weighing on results. However, Zuckerberg said on the call that sales of Meta’s AI glasses are “accelerating” and that AI glasses will be “the main way” his company gets personal superintelligence into everyday lives. While Meta has shifted messaging to frame VR and AR devices as future AI endpoints — and while Zuckerberg still calls the Metaverse an important long-term play — investors remain skeptical, and AI is undeniably front and center today.
So far, Wall Street has been generous. Meta shares were up more than 16% this year ahead of earnings, and nearly every analyst covering the stock still rates it a buy. Ahead of the earnings release, Yahoo Finance data showed that 63 of 71 analysts rate Meta a “Buy” or “Strong Buy” with price targets clustering between $750 and $800 — so skepticism is thin on the ground, but risk is high. The average target already implies very little upside from the current share price.
A knockout quarter gave Meta the win. But with its AI moonshot now officially on the clock, the real test is just beginning.
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