Meta Platforms beat market expectations for second-quarter revenue on Wednesday (July 31) and issued a rosy sales forecast for the third quarter, signaling that robust digital-ad spending on its social media platforms can cover the cost of its artificial-intelligence investments. Shares of the company were up 6.8 per cent after the bell.
Morning commute traffic streams past the Meta sign outside the headquarters of Facebook parent company Meta Platforms Inc in Mountain View, California, US, on Nov 9, 2022.Meta Platforms beat market expectations for second-quarter revenue on Wednesday and issued a rosy sales forecast for the third quarter, signaling that robust digital-ad spending on its social media platforms can cover the cost of its artificial-intelligence investments.
Li and Chief Executive Mark Zuckerberg said those tools would continue to drive growth in the coming two years, while new generative AI features like chat assistants would take longer to monetise. "With its margins as healthy as they are, Meta's investors should feel comfortable with the company's vigorous investments in its plans for the future," Willens added.
Meta's earnings come after disappointing results posted by fellow tech industry powerhouses which suggested the payoff from hefty investments in AI technology may take longer than Wall Street had hoped. That ended a run of strong quarters for Meta, which has climbed back from a share price meltdown in 2022 by slimming its workforce and leaning in to investor excitement about generative AI technologies.
Meta has picked up hiring over the last year, particularly of AI engineers, while continuing to quietly dissolve teams elsewhere. It said on Wednesday that its workforce was down one per cent year-over-year, though Li said she expected head count to be "meaningfully higher" by the end of the year.
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