Meta stock rallied after it reported better-than-expected second-quarter results, with revenue and profits exceeding analysts’ expectations.
Meta stock surged higher in after hours trading on Wednesday, after reporting strong second-quarter results. Shares in the technology giant soared 11.8% to $777.08 as it climbed towards a new record high.
The company revealed earnings per share of $7.14 between April and June, up from $5.16 during the same time last year. This represents a 36% increase and comes in much higher than analysts’ expectations.
In an impressive set of results, Meta’s Q2 revenue also rose 22%. The final total reached $47.52 billion, above experts’ predictions of $44.81 billion. Daily users of the company’s apps, including Facebook, Instagram, WhatsApp, Messenger, and Threads reached 3.48 billion. This was a 6% increase from the same quarter last year.
Meta stock climbs as AI investment increases
Meta’s strong earnings come as the US-based firm continues to invest heavily in artificial intelligence (AI) and highly skilled workers. The company expects yearly expenses to total between $114 billion and $118 billion, up 20% to 24% on 2024 figures, with costs expected to rise even further in 2026.
As part of its ongoing AI plans, Meta recently invested $14.3 billion in AI company Scale, while also hiring its CEO, Alexandr Wang. In June, it signed a 20-year agreement to secure nuclear power in order to meet the surging global AI demand.
Company bosses believe that AI is a key driver of growth going forward, especially in terms of advertising. It has allocated $17.01 billion to capital expenditure this quarter, focusing heavily on its “superintelligence” project.
Huge new data centres, like the already completed Prometheus, and Hyperion (currently in construction), signify Meta’s ambitious plans to become a leader in AI development. Such projects are designed to take the company from a social platform to superintelligence pioneer.
Meta CEO Zuckerberg outlines AI vision
Mark Zuckerberg, CEO of Meta, has openly stated how he believes AI is crucial to the company’s future growth. This week, he shared his long-term AI plans, describing how “personal superintelligence” can help people achieve more in their lives.
According to Zuckerberg, AI glasses will become the main way people use superintelligence. This move could mark a new direction of travel for Meta’s hardware products in this new AI-driven digital age.
He said: “Meta’s vision is to bring personal superintelligence to everyone. We believe in putting this power in people’s hands to direct it towards what they value in their own lives.
“This is distinct from others in the industry who believe superintelligence should be directed centrally towards automating all valuable work, and then humanity will live on a dole of its output.”
There is a growing consensus among analysts that Meta’s focus on AI could serve to protect it from future risks. Many believe it will help to support long-term growth for the firm moving forward.
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