Meta forecasts first quarter revenue below estimates

The results follow CEO Mark Zuckerberg's announcement last week that Meta plans capital expenditure of as much as $65 billion in 2025 to expand its AI infrastructure, while also increasing hiring for AI roles.

Meta Platforms forecast first-quarter revenue below Wall Street estimates on Wednesday, signaling its bets on pricey artificial intelligence-powered tools were struggling to attract additional digital ad dollars to its social media platforms.

The company expects quarterly revenue between $39.5 billion and $41.8 billion, compared with analysts' average estimate of $41.72 billion, according to data compiled by LSEG.

Slower digital advertising sales at Meta, responsible for the overwhelming share of its revenue, suggested a possible sector-wide weakening as brands brace for proposed U.S. policies in the U.S. that could destabilize the global economy.

The miss raises fresh spending questions for Meta, which relies on its core social media ads business to cover the costs associated with its AI ambitions and investments in "metaverse" technologies like smart glasses and augmented reality systems.

Family daily active people (DAP), a metric Meta uses to track unique users who open any one of its apps in a day, rose about 5% from a year earlier to 3.5 billion.

The results follow CEO Mark Zuckerberg's announcement last week that Meta plans capital expenditure of as much as $65 billion in 2025 to expand its AI infrastructure, while also increasing hiring for AI roles.