Connect with us

Published

7 months ago

on

Meta CEO Mark Zuckerberg appears at the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.

David Paul Morris | Bloomberg | Getty Images

Meta Platforms shares jumped more than 6% Thursday after the company topped earnings expectations and showed advertising resilience in a murky macroeconomic environment.

“Key here is that Meta’s adv. demand trends appear to be relatively healthy and while we’re watching for any impacts from macro and lower spend from China-based advertisers given the de minimis change, Meta’s scale of users and advertisers + focus on newer products are offsetting some macro challenges,” wrote Citi’s Ronald Josey.

First-quarter revenues grew 16% from a year ago to $42.31 billion and topped a $41.10 billion estimate from LSEG. Earnings came in at $6.43 per share, versus the $5.28 per share expectation. Net income reached $16.64 billion, jumping 35% from $12.37 billion in the year-ago quarter.

The company also issued in-line guidance for the current period. Meta’s finance chief Susan Li said the company expects sales to range between $42.5 billion and $45.5 billion. Analysts polled by LSEG had forecast $44.03 billion in revenues.

“Our business is also performing very well, and I think we’re well positioned to navigate the macroeconomic uncertainty,” Meta CEO Mark Zuckerberg reassured analysts on an earnings call Wednesday.

Read more CNBC tech news

Investors this earnings season are watching for signs that President Donald Trump‘s tariff blit hampering advertising demand — where many technology businesses make up a sizeable chunk of revenues. Snap and Google have already warned of potential headwinds to their ad businesses.

Advertising revenue for the first quarter came in at $41.39 billion, topping a forecast of $40.44 billion from Wall Street. But Li told analysts that Meta has “seen some reduced spend in the U.S. from Asia-based e-commerce exporters,” which may stem from the ending of the de minimis trade loophole on Friday.

“The digital ad market is likely to get a bit jittery over coming months, but META’s performance orientation and significant AI ad investments should mean continued relative share gains against the field,” wrote Barclays analyst Ross Sandler.

Meta also upped its capital expenditures range to $64 billion to $72 billion from $60 billion to $65 billion to reflect more data center investments in artificial intelligence and a potential uptick in infrastructure hardware costs as trade uncertainty continues.

Bernstein’s Mark Shmulik called the hike in spending a “bold strategy” against an uncertain macroeconomic backdrop, but called Meta the “safest and most exciting dodgeball team around.”

“We continue to believe that Meta is well positioned for a tougher macro environment given its scaled advertiser base, highly performant platform, & vertical agnostic inventory,” wrote JPMorgan’s Doug Anmuth.

WATCH: Meta is showing tangible examples of AI investment, says Deepwater’s Gene Munster

Meta is showing tangible examples of AI investment, says Deepwater's Gene Munster

Related Topics:
Continue Reading

Technology

Nvidia’s beat and raise should wow even its most hardened critics, and the stock soars

Published

5 hours ago

on

November 20, 2025

By

Nvidia's beat and raise should wow even its most hardened critics, and the stock soars

Continue Reading

Technology

Nvidia CEO Jensen Huang rejects talk of AI bubble: ‘We see something very different’

Published

6 hours ago

on

November 20, 2025

By

Nvidia CEO Jensen Huang rejects talk of AI bubble: 'We see something very different'

Jensen Huang, chief executive officer of Nvidia Corp., during the US-Saudi Investment Forum at the Kennedy Center in Washington, DC, US, on Wednesday, Nov. 19, 2025.

Stefani Reynolds | Bloomberg | Getty Images

In the weeks leading up to Nvidia’s third-quarter earnings report, investors debated whether the markets were in an AI bubble, fretting over the massive sums being committed to building data centers and whether they could provide a long-term return on investment.

During Wednesday’s earnings call with analysts, Nvidia CEO Jensen Huang began his comments by rejecting that premise.

“There’s been a lot of talk about an AI bubble,” Huang said. “From our vantage point we see something very different.”

In many respects, Huang’s remarks are to be expected. He’s leading the company at the heart of the artificial intelligence boom, and has built its market cap to $4.5 trillion because of soaring demand for Nvidia’s graphics processing units.

Huang’s smackdown of bubble talk matters because Nvidia counts every major cloud provider — Amazon, Microsoft, Google, and Oracle — as a customer. Most of the major AI model developers, including OpenAI, Anthropic, xAI and Meta, are also big buyers of Nvidia GPUs.

Read more CNBC reporting on AI

Huang has deep visibility into the market, and on the call he offered a three-pronged argument for why we’re not in a bubble.

First, he said that areas like data processing, ad recommendations, search systems, and engineering, are turning to GPUs because they need the AI. That means older computing infrastructure based around the central processor will transition to new systems running on Nvidia’s chips.

Second, Huang said, AI isn’t just being integrated into current applications, but it will enable entirely new ones.

Finally, according to Huang, “agentic AI,” or applications that can run without significant input from the user, will be able to reason and plan, and will require even more computing power.

In making the case of Nvidia, Huang said it’s the only company that can address the three use cases.

“As you consider infrastructure investments, consider these three fundamental dynamics,” Huang said. “Each will contribute to infrastructure growth in the coming years.”

Reversing the slide

In its earnings release, Nvidia reported revenue and profit that sailed past estimates and issued better-than-expected guidance. Last month, Huang provided a $500 billion forecast for sales of the company’s AI chips over calendar 2025 and 2026.

The company said on Wednesday that its order backlog didn’t even include a few recent deals, like an agreement with Anthropic that was announced this week or the expansion of a deal with Saudi Arabia.

Nvidia's revenue is bigger story than gross margins moving forward, says Susquehanna's Chris Rolland

“The number will grow,” CFO Colette Kress said on the call, saying the company was on track to hit the forecast.

Prior to Wednesday’s results, Nvidia shares were down about 8% this month. Other stocks tied to the AI have gotten hit even harder, with CoreWeave plunging 44% in November, Oracle dropping 14% and Palantir falling 17%.

Some of the worry on Wall Street has been tied to the debt that certain companies have used to finance their infrastructure buildouts.

“Our customers’ financing is up to them,” Huang said.

Specific to Nvidia, investors have raised concerns in recent weeks about how much of the company’s sales were going to a small number of hyperscalers.

Last month, Microsoft, Meta, Amazon and Alphabet all lifted their forecasts for capital expenditures due to their AI buildouts, and now collectively expect to spend more than $380 billion this year.

Huang said that even without a new business model, Nvidia’s chips boost hyperscaler revenue, because they power recommendation systems for short videos, books, and ads.

People will soon start appreciating what’s happening underneath the surface of the AI boom, Huang said, versus “the simplistic view of what’s happening to capex and investment.”

WATCH: Nvidia posts Q3 beat

Nvidia posts Q3 beat, CEO Huang says Blackwell chip sales 'off the charts'

Continue Reading

Technology

Asian chip names rally as Nvidia forecasts hotter-than-expected sales after earnings beat

Published

7 hours ago

on

November 20, 2025

By

Asian chip names rally as Nvidia forecasts hotter-than-expected sales after earnings beat

C. C. Wei, chief executive officer of Taiwan Semiconductor Manufacturing Co. (TSMC), left, and Jensen Huang, chief executive officer of Nvidia Corp., during the TSMC sports day event in Hsinchu, Taiwan, on Saturday, Nov. 8, 2025.

Bloomberg | Bloomberg | Getty Images

Asian chip stocks rallied in early trading Thursday after American AI chip darling Nvidia beat Wall Street expectations and issued stronger-than-expected guidance for the fourth quarter. 

South Korea’s SK Hynix popped around 4%. The memory chip maker is Nvidia’s top supplier of high-bandwidth memory used in AI applications. 

Samsung Electronics, which also supplies Nvidia with memory, was also up nearly 4%. The company has been working to catch up to SK Hynix in high-bandwidth memory to land more contracts with Nvidia. 

Taiwan Semiconductor Manufacturing Company, the world’s largest contract chipmaker, which produces most of Nvidia’s chip designs, rose 4% in Taipei.

“We expect Nvidia’s results to drive higher earnings estimates across the sector, including for its primary GPU supplier TSMC, memory vendors SK Hynix and Samsung, and the broader Asian subcomponent and assembly value chain,” Rolf Bulk, equity research analyst at New Street Research, told CNBC.

In Tokyo, Renesas Electronics, a key Nvidia supplier, added about 4%. Tokyo Electron, which provides essential chipmaking equipment to foundries that manufacture Nvidia’s chips, gained 5.87%. Another Japanese chip equipment maker, Lasertec, was up about 6%. 

Japanese tech conglomerate SoftBank skyrocketed nearly 7%, though the firm recently offloaded its shares of Nvidia. Softbank owns the majority of British semiconductor company Arm, which supplies Nvidia with chip architecture and designs.

SoftBank is also involved in a number of AI ventures that use Nvidia’s technology, including the $500 billion Stargate project for data centers in the U.S.

Nvidia’s sales and outlook are closely watched by the technology industry as a sign of the health of the AI boom, and its strong earnings could ease recent fears regarding an AI bubble.  

“There’s been a lot of talk about an AI bubble,” Nvidia CEO Jensen Huang told investors on an earnings call. “From our vantage point, we see something very different.”

Continue Reading

Trending