Meta Invests $14.3B in AI Amid Strong Q3 Revenue Growth

Meta Platforms reported robust third-quarter earnings for 2025, with revenue surging 26% year-over-year to $51.24 billion, driven by strong advertising performance. However, net income plunged 83% to $2.71 billion due to a one-time tax charge of $15.93 billion tied to new U.S. corporate tax laws; excluding this, net income would have been $18.64 billion.

CEO Mark Zuckerberg defended the company's aggressive AI spending, revealing that Meta has invested $14.3 billion this year in its AI unit, now rebranded as Superintelligence Labs. He stated, "It is better to spend too much now than fall behind," and emphasized that compute needs are rising faster than expected, requiring massive data centers and cloud deals with Google, Oracle, and CoreWeave.

Meta raised its capital expenditure range for 2025 to $70 billion to $72 billion, up from prior guidance. Similarly, Alphabet increased its capex forecast to $91 billion to $93 billion, and Microsoft also expects higher spending. Investor reactions varied: Meta's stock fell 8% after the call, Alphabet's rose 6%, and Microsoft's slipped 3%.

Despite the spending, Meta's advertising business remained strong, with daily active people averaging 3.54 billion in September 2025, up 8%, ad impressions growing 14%, and average ad price increasing 10%. However, the Reality Labs division reported an operating loss of $4.4 billion in Q3, with cumulative losses exceeding $70 billion since 2020.

Looking ahead, Meta expects Q4 revenue between $56 billion and $59 billion, with total 2025 expenses projected at $116 billion to $118 billion. Zuckerberg reiterated that AI investments are already yielding returns in the core business, justifying the strategy to avoid underinvesting in the competitive tech landscape.