Meta pulled in $44.8 billion in revenue for Q2 2025, up 15% year over year. Operating profit stood near $17.6 billion. Capital spending is running toward $70 billion this year, mostly dedicated to AI infrastructure. Despite strong numbers, urgency shows in how Meta is chasing talent, offering packages in the hundreds of millions, even approaching $1 billion to lure top AI engineers away from competitors.
Instagram still commands 2 billion monthly users, but engagement tells a different story. Interaction on Reels dropped to 0.50%, a 16% decline from last year. Carousel posts average around 0.55%. Feeds are saturated with ads and promotional content, diminishing the user experience.
Meta AI reports nearly 1 billion monthly users early in 2025. However, this figure largely reflects integration within existing apps rather than organic adoption. Meta’s LLaMA 3 model scored well on benchmarks earlier this year, outperforming competitors like Gemini Pro and Claude, but has not shifted user behavior. ChatGPT remains dominant with roughly 60% market share, compared to Gemini’s 13.5% and Claude’s below 4%.
Reality Labs continues to lose nearly $4 billion per quarter. Meanwhile, the core ad business generated $43.9 billion in revenue, up 14.6% year over year. Operating income for Meta’s family of apps rose almost 16%.
The core platforms are showing signs of fatigue. Facebook feels cluttered, WhatsApp remains unchanged for years, and Threads, despite rapid user growth to 350 million, has yet to monetize. Meta is attempting to solve these issues by layering AI into user experiences, pushing chatbots and assistants that users did not ask for. This approach has not increased engagement and risks user fatigue.
Google’s AI integration differs by augmenting existing user habits on Search and YouTube rather than attempting to overhaul them. Meta’s push demands users adapt, which has slowed progress.
Analysts remain cautiously optimistic, with price targets near $755 to $783 suggesting about 6% upside from current trading levels in the low $700s. However, much depends on Meta’s ability to translate AI investments into stronger user engagement and revenue growth soon.
Meta is not in immediate danger. It remains profitable with vast reach and resources. Still, the pressure mounts. Without rapid AI-driven gains, growth could plateau, leading to a gradual decline.
Note: This is not financial advice and is for educational purposes only. Please conduct your own due diligence.
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