Meta Platforms Inc. reported stronger-than-expected Q2 sales on Wednesday, reflecting the company’s successful AI-driven advertising strategies. The news sent Meta’s shares soaring by as much as 10% in Thursday trading, adding $123 billion in market value—the stock’s largest intraday gain since February.
CEO Mark Zuckerberg is leveraging this momentum to justify Meta’s significant investments in AI and the metaverse. During an investor call, he emphasized the company’s focus on developing large language models, AI-powered smart glasses, and virtual reality headsets. “AI is going to change everything over multiple time horizons,” Zuckerberg noted, underscoring the transformative potential of these technologies.
Meta’s AI innovations are already enhancing its core advertising business by improving ad targeting and efficiency. The company has begun rolling out generative AI tools, enabling marketers with limited budgets to create more engaging content. Zuckerberg highlighted that AI will eventually impact nearly every product Meta offers, further solidifying its central role in the company’s strategy.
As of June 30, Meta’s user base across Facebook, Instagram, and WhatsApp reached 3.27 billion, a 7% increase year-over-year. The company reported Q2 sales of $39.1 billion, surpassing analysts’ expectations of $38.3 billion. Meta projects Q3 sales between $38.5 billion and $41 billion, with analysts anticipating $39.2 billion.
Zuckerberg’s commitment to AI is evident in Meta’s updated capital expenditure forecast, now set at $37 billion to $40 billion for the year. This increase reflects the company’s heavy spending on data centers and computing power to stay competitive in the AI race. Meta recently introduced its largest AI model to date, requiring hundreds of millions of dollars to train, while its Reality Labs division—focused on metaverse development—reported a $4.5 billion loss in Q2.
Balancing long-term investments with immediate financial returns has been challenging for Meta. However, Zuckerberg has taken steps to bolster the company’s stock, including job cuts, a $50 billion share buyback program, and Meta’s first-ever quarterly dividend. Despite these measures, he remains committed to increasing capital expenditures to fuel AI research and product development.
Meta’s AI initiatives are gaining traction, even if they haven’t yet significantly impacted the bottom line. Zuckerberg pointed out that the Meta AI chatbot could become the most widely used AI assistant globally by year’s end. He believes that in the future, businesses will increasingly rely on AI-powered chatbots to manage customer service.
Meta’s approach contrasts with growing investor impatience seen in other tech giants like Microsoft and Alphabet, whose heavy AI investments have yet to yield substantial commercial returns. Zuckerberg, however, remains optimistic, arguing that the long-term benefits of over-investing in AI far outweigh the risks of falling behind.
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