Meta Stock Jumps 5% after Impressive Q1 Net Income, Strong Q2 Outlook
Despite a rocky beginning for the META share price, investor trust has been restored by Meta's Q1 2025 earnings, supporting Meta stock price
Quick overview
- Meta's Q1 2025 earnings report showed a 35% increase in net income and a 16% rise in revenue, exceeding analyst expectations.
- Despite earlier declines due to regulatory pressures, Meta's stock rebounded in after-hours trading, indicating renewed investor confidence.
- The company reported strong advertising revenue, which accounted for 98% of total revenue, and provided optimistic Q2 revenue guidance.
- While Reality Labs continues to incur significant losses, Meta's overall performance and user growth suggest a positive outlook for future revenue.
Live META Chart
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Despite a rocky beginning for the META share price, investor trust has been restored by Meta’s Q1 2025 earnings, which have increased the Meta stock’s value in after-hours trading.
META Regains Traction Following Strong Q1 Report
Meta Platforms (META) started the trading session under pressure, opening lower amid a cautious market atmosphere. Yet, as traders positioned themselves ahead of the company’s quarterly earnings release, the stock steadily erased its losses and finished the regular U.S. session unchanged.
The real momentum came after market close. Meta unveiled an impressive set of first-quarter results, reporting a 35% increase in net income and a 16% jump in revenue to $42.3 billion—both comfortably beating analyst forecasts. The upbeat numbers ignited a rally in after-hours trading, setting the stage for a potentially strong open in the next session.
From Record Highs to a Deep Correction: META’s Price Path
Earlier in the year, Meta shares touched a record peak of $740.91 in early February, buoyed by enthusiasm around its resurgence in digital advertising and expanding AI initiatives. However, sentiment shifted sharply by mid-April, dragging the stock below $480—a steep drop of more than 35%—as broader tech weakness and regulatory uncertainties weighed on investor confidence.
Meta Stock Chart Weekly – Pushing Above the 50 SMA 
Specifically, Meta’s messaging platform WhatsApp came under heightened scrutiny in Europe after surpassing the 45 million active user threshold, which triggered tighter compliance under the EU’s Digital Markets Act. The resulting regulatory pressure added to the downward drift in Meta’s share price, which bottomed near $641.43 before stabilizing.
Technically, the decline saw the 50-week simple moving average (SMA) turn into a resistance level, while the longer-term 100-week SMA acted as a cushion of support. The post-earnings recovery now places the stock back above the 50-week SMA, a positive technical signal that could invite further upside.
Meta Q1 2025 Earnings Highlights (Jan–Mar)
- Revenue: $42.31 billion, +16% YoY; beat analyst expectations of $41.22 billion.
- Net income: $16.64 billion, +35% YoY — second-highest in Meta’s history after Q4 2024.
- Earnings per share (EPS): $6.43, well above analyst projection of $5.22 (Zacks).
- Advertising revenue: Accounted for 98% of total revenue; average ad price rose 10% YoY.
Geographic performance:
- Sales increased in Asia-Pacific and “Rest of World.”
- Declined slightly in the U.S. and Europe.
- Daily Active Users: Rose 6% YoY to 3.43 billion across platforms (Facebook, Instagram, WhatsApp, Threads).
- Q2 revenue guidance: Estimated between $42.5B and $45.5B, above Wall Street’s $39.1B forecast.
- Capital Expenditures: Surged to $13.69 billion, more than double YoY — largely for AI-focused data center buildout.
Reality Labs:
- Reported Q1 loss of $4.21 billion.
- Continues to be a drag on earnings; lost $17.5B in 2024 alone.
Meta delivered a strong Q1, beating estimates across the board with standout profit and robust advertising strength. While Reality Labs continues to post heavy losses, investor sentiment remains buoyed by healthy user growth, AI infrastructure investment, and upbeat Q2 revenue guidance.
Looking Ahead: Revenue Momentum and Market Repricing
Investor sentiment has been further boosted by Meta’s upbeat outlook for the second quarter. The company signaled confidence in its core advertising business while continuing to invest in its AI initiatives and monetization efforts across Facebook, Instagram, and WhatsApp. The latest results reflect not only a bounce-back in advertising revenue but also an encouraging trajectory for Meta’s diversified revenue streams.
Conclusion
Meta’s better-than-expected Q1 2025 earnings have helped reverse recent weakness tied to regulatory concerns and market volatility. With shares rebounding in after-hours trading and the stock reclaiming a key technical level, the tone has shifted decisively more bullish. Investors will now watch whether this momentum can carry through into the next session and into Q2, where Meta’s guidance suggests continued revenue strength ahead.
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