Meta Platforms (META) delivered an "impressive" Q1 report, with one of the few concerns being a higher capital expenditure, or CapEx, outlook, now expected to reach $72 billion, RBC Capital Markets said in a note Thursday.

Analysts, including Brad Erickson, said the tech giant raised its full-year 2025 CapEx guidance to $64 billion to $72 billion, up from $60 billion to $65 billion, signaling strong confidence in future revenue growth. Most of the increase is allocated to core infrastructure, which reflects how deeply artificial intelligence is integrated across Meta's operations. This added capacity is expected to support real-time advertising growth in the near term, rather than long-term, speculative projects.

The analysts said, on the downside, the higher CapEx is partly driven by rising infrastructure hardware and component costs, which may reduce return on invested capital and signal structural cost pressures. Bears also argue that increased spending on core infrastructure could stress margins, especially in non-AI areas, and that global supply chain uncertainties are adding further pressure to infrastructure costs.

"Meta is driving industry-leading conversion improvements, leading to share gains and has significant optionality to expand utility for its user base, which it can increasingly monetize over time, with AI being the central enabler," the analysts said.

RBC has an outperform rating and a $740 price target on Meta. Shares of the company were about 5% higher in recent trading.

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