Meta Ad Revenue Soars Thanks to AI, Stock Makes Impressive Recovery

Meta Platforms (META.O) just announced its forecast for third-quarter revenue to reach between $47.5 billion and $50.5 billion, much higher than the average estimate of $46.15 billion from LSEG analysts.

The strong results could help ease investor concerns about the social media giant's aggressive spending pace, at least for now.

The company is trying to change the impression that it is falling behind rivals like Microsoft (MSFT.O) and Alphabet's (GOOGL.O) Google in the AI race.

Meta Ad Revenue Soars Thanks to AI, Stock Makes Impressive Recovery

AI drives ad revenue

Meta raised its annual capital expenditure forecast by $2 billion, to between $66 billion and $72 billion. CEO Mark Zuckerberg said AI is driving big leaps in Facebook and Instagram's advertising business.

Meta also said rising costs to build data center infrastructure and employee wages will push 2026 expense growth past the 2025 rate. The company also plans higher capital expenditures next year.

Investors have largely supported Zuckerberg's pursuit of superintelligence, the hypothetical concept of AI surpassing human intelligence in every way possible, pushing the company's shares up nearly a fifth so far this year.

The company spent $14.3 billion to buy Scale AI shares and hired CEO Alexandr Wang. Meta spent more than $100 million to attract AI talent from competitors.

Surging revenue and legal challenges

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Meta faces an antitrust lawsuit in the US, being asked to restructure or sell Instagram and WhatsApp for allegedly monopolizing the social media market. Court filings are expected in September, with a ruling expected by the end of the year at the earliest. CEO Mark Zuckerberg has admitted the company was slow to respond to the threat from TikTok.

Meta reported revenue of $47.52 billion in the second quarter ended June 30, beating estimates of $44.80 billion. Earnings per share were $7.14, beating forecasts of $5.92. Fourth-quarter revenue is expected to grow more slowly than the third quarter, with a 1% benefit from the weak dollar.

“Meta’s AI-driven investments in its advertising business continue to pay dividends… But Meta’s outsized spending on AI visions will continue to raise questions and scrutiny from investors eager to see returns,” commented Minda Smiley, senior analyst at Emarketer.

She also noted that the company's earnings "come amid legal challenges Meta faces in the US and abroad, adding to the uncertainty about its future."

In April, Zuckerberg testified that the company was initially slow to recognize the competitive threat from TikTok, and that Meta tried to build multiple apps without success.

CEO Zuckerberg pledged to invest heavily in AI, aiming for superintelligence surpassing human intelligence. Although the Llama 4 model received poor feedback, Meta continued to push its AI strategy, competing with Microsoft (spending $120 billion on AI) and Alphabet (spending $85 billion).

Source: https://baonghean.vn/doanh-thu-quang-cao-meta-tang-vot-nho-ai-co-phieu-phuc-hoi-an-tuong-10303568.html