Many eyes are in Silicon Valley, with the biggest tech companies, including Meta, hoping to survive the storm as President Trump's tariffs disrupt global trade.
On Wednesday, Meta Chief Executive Mark Zuckerberg said investors had plans.
In a quarterly revenue call, Zuckerberg said his company, which owns Facebook, Instagram and WhatsApp, will resort to five pillars he considers as its strengths. They used artificial intelligence to improve advertising for the company, to provide more time for people to spend on the platform, make more money from messaging their messages, and include double their AI investments.
He said the plan is already working, adding that he expects a continuing increase in revenues in Meta's advertising business.
“This was a good start to what I hope for is a fierce year,” Zuckerberg said. “Even our huge investments don't have to be successful in all of these areas.” There is no return on investment.
“But if that's the case, I think we'll feel very good about what's going on,” he added.
Zuckerberg's optimism has contrasted with comments made by executives from other companies over the past few weeks. Many of them calmed down and spoke about fallout guidance that might be seen from Trump's tariffs. His comments are heavy because meta is often seen as the basis of the tech industry, especially in online advertising.
Data compiled by market analytics firm Factset shows revenues of $42.3 billion in the first quarter were $42.3 billion, up 16% from a year ago, with Wall Street estimates above $41.3 billion. Profit was $16.6 billion, up 35% from the previous year's $12.4 billion, exceeding the $13.6 billion estimate.
META is expected to earn between $42.5 billion and $45.5 billion in the current quarter, with the high-end range exceeding Wall Street's forecast of $43.8 billion. The stock rose more than 5% in after-hours trading.
Meta's business has been steadily increasing in recent years as it has invested in AI to propose a variety of posts, videos and advertisements to its users. Zuckerberg said the investment has made people come back to Meta's app more regularly and click on more relevant ads.
However, the company faces new challenges during its Trump era. This tariff could affect Meta's biggest initiative. This includes spending billions of dollars on infrastructure projects such as data centers that use raw materials driven by Trump's import tax.
Meta expects to spend more on these infrastructure investments. On Wednesday, it raised its capital expenditure forecast for the year from $640 billion to $72 billion, up from $6 billion to $65 billion.
Meta also faces major revenue questions. Source: Digital advertising sales are sold to various brands and retailers of all sizes. The more tariffs hit small businesses, the less they can afford to spend on Facebook and Instagram ads.
Trump has set the highest tariffs on imports from China, and Chinese e-commerce powers such as Sheen and Tem are especially important for Meta's business. In 2023, Chinese companies accounted for 10% of Meta's revenue.
Wednesday's revenues did not show a backlash of advertising as Trump's tariffs were announced in April and ended in March.
But in the revenue call, Meta Chief Financial Officer Susan Lee said “some” Asian retailers have already cut advertising spending on the company's platform in anticipation of the end of the US trade loophole on Friday. A loophole known as the De Minimis exemption exempts imports of less than $800 from jobs or taxes.
Meta's financial guidance considers the “uncertainty” of “how macro environments evolve over time.”
Meta is also taking an anti-trust trial in Washington for whether he illegally neglected competition in social networking by purchasing Instagram and WhatsApp when he was a young startup. The outcome of the multi-week trial, the first major technology case to be indicted by the current Trump administration, could reconstruct the US antitrust landscape and Silicon Valley ecosystem.
Last week, the European Union said it was fined 200 million euros ($230 million) to break the Digital Markets Act, a 2022 law aimed at increasing competition in the digital economy.
The company said Wednesday it would monitor a “active regulatory environment” but it could “have a major impact” on its core business.
