Meta share price jumped more than 10% following the company’s report of second-quarter earnings on Wednesday. Meta’s second-quarter sales rose 22% over the year, and it is the same growth rate as the previous year.
Meta also gave a potential sales forecast and slightly lifted its outlook for total spending, as it escalates its generative AI initiatives.
The Menlo Park, Calif.-based Meta said that it earned $7.14 per share for the June-ended quarter, which is up 38% from the year earlier. The sales increased 22% to $47.52, compared to analyst estimates of $44.18 billion.
The Facebook parent company told investors it expects sales of $49 billion the the current quarter, according to the midpoint of its range. The estimation was well ahead of the $46.23 billion in Q3 sales, as the analytics were forecasting earlier.
Meta declared that it also expects to spend $69 billion on capital expenditure for 2025, according to the midpoints of its range. That is up from a previous year $68 billion midpoint.
Meta also expects a total expenditure of $116 billion for the year, which is up from $115 billion the company provided in its Q1 guidance last April.
Zuckerberg has announced the strength of Meta’s core business as he plans to spend hundreds of billions on AI-related infrastructure. That potential stems from Meta’s advertising business, which accounted for 98% of the company’s revenue. AI-powered enhancements to ad targeting boost conversion rates are accelerated by approximately 5% on Instagram and 3% on Facebook.
Before Earnings, Meta stock fell a fraction in normal trading; however, shares have gained 19% this year and 50.6% in the past 12 months. Meta’s Reality Lab segment experienced a loss of $4.5 billion versus expectations of $4.8 billion.
Last week, Mark Zuckerberg, the CEO, announced that a former OpenAI researcher, Shengjia Zhao, who helped him to develop the company’s ChatGPT model, had been named founder and chief scientist of Meta’s Superintelligence Lab.
During Meta’s second-quarter earnings call, Zuckerberg stated that smart glasses will soon become the primary way people interact with AI, replacing other devices as their primary computing devices.
He told the investors on Wednesday, “I continue to think that glasses are going to be the ideal form factor for AI”. He also added that wearables with cameras, microphones, and displays will unlock new levels of utility.
Meta’s Q2 earnings may well set a new standard for how advertising platforms evaluate campaign efficiency and creative potential in the era of AI.
