Meta Platforms(US:META) Hua Er Jie Jian Wen·2025-07-22 03:58Core Viewpoint - Deutsche Bank's report anticipates that AI capital expenditures will be a focal point for Meta, with investors needing to monitor cost pressures closely [1][14]. Revenue Expectations - Meta's second-quarter revenue is expected to be adjusted upwards to $45 billion, representing a year-over-year growth of approximately 15% [1]. - The total revenue projections for FY25E and FY26E are $187.76 billion and $212.895 billion, respectively, with growth rates of 1.2% and 1.5% compared to previous estimates [2]. Advertising Performance - Meta's advertising revenue growth in Q2 is expected to increase by about 1 percentage point quarter-over-quarter, contrasting with Wall Street's predictions of a decline in U.S. and Canadian advertising growth [3][4]. - The core driver of this strong performance is attributed to the application of AI technology, particularly Meta's Advantage+ tool, which significantly improves advertisers' return on ad spend (ROAS) [4]. User Engagement - User engagement metrics for Meta's core applications have shown positive improvements due to AI enhancements, supporting future advertising display growth [7]. - Facebook's global conversation count decreased by 5% year-over-year, while Instagram's increased by 4% [8]. Cost and Capital Expenditure - Despite positive revenue trends, the focus has shifted to the cost side, with expectations for Meta's total expenses to remain between $113 billion and $118 billion for FY25, potentially increasing in the second half of the year [14]. - Capital expenditures for FY25 are projected to be between $64 billion and $72 billion, reflecting anticipated hardware cost inflation [14]. AI Talent Competition - Meta is engaged in a fierce competition for AI talent, offering bonuses of up to $100 million to top AI engineers, which contributes to rising operational and capital expenditures [14]. - The company has announced a strategic investment of $14 billion to acquire a 49% stake in Scale AI, further emphasizing its commitment to AI development [14].