Facebook’s parent company, Meta (META) announced his fiscal third quarter results after the closing bell on Wednesday, beating analysts’ expectations for both earnings and results. The company expects fourth-quarter revenue of between $45 billion and $48 billion. Analysts expected $46.09 billion. The company also said it expects significant growth in capital spending in 2025.

The tech giant’s stock fell more than 3% following the report.

“We expect our full-year 2024 capital expenditures to be between $38 billion and $40 billion, an update from our previous range of $37 billion to $40 billion,” Susan said. Li, Meta’s chief financial officer, in a statement.

“We continue to expect significant growth in capital spending in 2025. Given this, as well as the ultimately weighted nature of our capital spending for 2024, we expect a significant acceleration in capital spending growth. infrastructure next year as we recognize higher growth in depreciation and operating expenses. of our expanded infrastructure fleet.

For the third quarter, Meta reported earnings per share (EPS) of $6.03 on revenue of $40.5 billion. Wall Street expected EPS of $5.25 on revenue of $40.2 billion, according to analyst estimates compiled by Bloomberg. The company reported EPS of $4.50 and revenue of $34.1 billion in the same quarter last year.

Advertising revenue came in at $39.8 billion versus an expected $39.7 billion, while Meta’s Reality Labs segment, which includes sales of its Quest line of augmented reality headsets, recorded a revenue of $39.8 billion. $270 million business. Analysts expected the company to generate $312 million. The segment also recorded a loss of $4.4 billion, compared to $4.6 billion expected by analysts.

The social media giant has quickly become an artificial intelligence powerhouse in its own right, on par with Microsoft (MSFT), Google (GOOG, GOOGLE) and Amazon (AMZN), and investors are on board.

Meta’s AI strategy includes deploying its Llama family of models across its consumer offerings and advertising products. It also offers the platform as open source software. To this end, Meta reported that organizations ranging from Accenture (ACN) and DoorDash (DASH) to Goldman Sachs (GS) use Llama to develop their own AI software.

Meta gains follow a information office report that the company is working on its own search functionality for its Meta AI service, which will allow users to ask questions and get answers about current events. The goal is to ensure that Meta will no longer need to rely on Google or Microsoft’s search engines to answer certain user queries.

The company also just won a successful Meta Connect conference, where it demonstrated a working prototype of its Orion augmented reality glasses. The device, which is still in its early stages, is intended to serve as a pair of glasses that allow you to talk with other users via holograms projected onto the real world.

CEO Mark Zuckerberg and company also discussed the success of Meta’s Ray-Ban Meta smart glasses, which are gaining popularity, and launched the entry-level Quest 3S augmented reality headset.

But all this AI and hardware development costs a lot of money. Meta reported $9.2 billion in capital expenditures during the quarter.

Beyond spending concerns, Meta also faces a host of high-profile legal challenges, including an FTC antitrust lawsuit alleging the company acts as an illegal monopoly, as well as lawsuits claiming Meta is harmful to mental health of adolescents.

Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here.

Read the latest financial and business news from Yahoo Finance.