META 2Q25: Product Innovations Drive Potential Revenue Acceleration-Part1

We publish META previews each quarter. Last quarter, we successfully bet against consensus and identified META's significant beat opportunity in 1Q25.

This quarter, we remain excited. After investing more resources in our research, we've strengthened our confidence in META's revenue growth for this quarter and the second half of the year. While CAPEX investments may lead to gross margin decline next year, considering AI is the most important growth theme for the next decade, I believe the market will be more tolerant of margin pressure than during META's large-scale Reality Lab investments, with more revenue upside potential ahead.

We recently spoke with 15 experts and have updates on several key topics:

1. Overall ad revenue trends for 2Q25 and 2025 expectations

2. Tariff impact

3. TEMU/SHEIN impact

4. Major product developments

5. Recommendation algorithm progress

6. META AMM status

7. META AI progress

8. Latest CAPEX updates

9. TikTok growth trends

10. Model Updates

In this Part 1 report, we'll primarily discuss topics 1-5.

Overall Ad Revenue Trends for 2Q25 and 2025 Expectations