By Jaspreet Singh and Echo Wang
(Reuters) – Meta Platforms forecast third-quarter revenue well ahead of Wall Street expectations, and raised the lower end of its capital expenses forecast for the year, sending its shares up 10% in extended trading.
For the third quarter, Meta said it expected total revenue of $47.5 billion to $50.5 billion, compared with analysts’ average estimate of $46.17 billion, according to data compiled by LSEG.
The company said in a statement that its third-quarter guidance assumed a 1% benefit from a weak dollar.
Meta said while it was not providing an outlook for fourth-quarter revenue, the company expected the year-over-year growth rate in the period to be slower than in the third quarter.
The social media giant raised the lower end of its annual capital expenditures forecast by $2 billion, driven by its high-stakes push for “superintelligence” in the heated AI race.
The Facebook and Instagram parent now expects capital expenditures to be between $66 billion and $72 billion.
Training and deploying advanced AI systems remain a capital-intensive endeavor, requiring costly hardware, massive computing resources and top-tier engineering talent.
After a lackluster reception for its Llama 4 model that led to staff departures, Meta has tried to revitalize its AI push by sparking a high-stakes talent war that has seen it dole out more than $100 million pay packages to researchers from rival firms.
CEO Mark Zuckerberg has pledged to spend hundreds of billions of dollars to build massive AI data centers, having shelled out $14.3 billion for a stake in startup Scale AI and poached its 28-year-old billionaire CEO Alexandr Wang.
To fund the push, the billionaire founder is leaning on Meta’s massive user base as well as AI-powered improvements in content engagement that make it a stable bet for advertisers even in times of economic uncertainty.
The social media giant recently introduced an AI-driven image-to-video ad creation tool under its Advantage+ suite, allowing marketers to generate video ads from static images.
Instagram, whose Reels product competes with ByteDance’s TikTok and YouTube Shorts for ad dollars in the popular short video format, is set to account for more than half of Meta’s ad revenue in the U.S. this year, according to research firm eMarketer.
Meta has also accelerated efforts to monetize its social media platforms WhatsApp and Threads by integrating ads.
The company last month named insider Connor Hayes as head of Threads, a sign it was moving the platform away from Instagram’s shadow after leaning on the photo-sharing app for growth.
(Reporting by Echo Wang in New York, Kenrick Cai in San Francisco and Jaspreet Singh in Bengaluru; Editing by Tasim Zahid, Sayantani Ghosh and Matthew Lewis)
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