Meta’s artificial intelligence spending spree appears to be paying off with investors, who sent the company’s stock soaring after hours on Wednesday following a blowout quarterly earnings report.
The Menlo Park, California-based company easily beat Wall Street’s expectations for the second quarter, helped by higher advertising revenue and a growing user base on its flagship social media platforms. The money is helping to fund the company's massive investments in AI development and hiring top talent at eye-popping compensation levels.
“Not only has Meta made demonstrable strides with AI, but it’s helping to future proof itself as a growth company, should its family of apps get affected by the current anti-trust case or changing social media sentiment,” said Forrester research director Mike Proulx.
Meta is facing an antitrust case that's now awaiting a judge's decision and could force the company to break off WhatsApp and Instagram, startups Meta bought more than a decade ago that have since grown into social media powerhouses.
The company earned $18.34 billion, or $7.14 per share, in the April-June period. That's up 36% from $13.47 billion, or $5.16 per share, in the same period a year earlier.
Revenue jumped 22% to $47.52 billion from $39.07 billion.
Analysts expected Meta to earn $5.88 per share on revenue of $44.81 billion, according to a poll by FactSet.
Meta's daily active user base on its apps — Facebook, Messenger, WhatsApp, Instagram and Threads — was 3.48 billion, up 6% year-over-year.
Meta said it expects costs to increase as it spends billions on infrastructure and luring highly compensated employees as it works on its AI ambitions. It's forecasting 2025 expenses to be in the range of $114 billion to $118 billion, up 20% to 24% year-over-year.
In the latest demonstration of his AI enthusiasm, CEO Mark Zuckerberg on Wednesday posted a note detailing his views on “personal superintelligence” that he believes will “help humanity accelerate our pace of progress.” While he said that developing superintelligence is now “in sight,” he did not detail how this will be achieved or exactly what “superintelligence” means.
The abstract idea of “superintelligence” is what rival companies call artificial general intelligence, or AGI. It's the latest pivot for a tech leader who in 2021 went all-in on the idea of the metaverse, changing the company’s name and investing billions into advancing virtual reality and related technology.
“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,” Zuckerberg wrote. “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.”
Zuckerberg said in a conference call he believes AI glasses are going to be “the main way we integrate superintelligence.”
Last month, Meta invested $14.3 billion in AI company Scale and recruited its CEO Alexandr Wang to join a team developing “superintelligence.” The tech giant also cut a 20-year deal in early June to secure nuclear power to help meet surging demand for AI and other computing needs.
Meta ended the quarter with 75,945 employees, up 7% from a year earlier.
Meta's shares rose $81.87, or 11.8% to $777.08 in after-hours trading — on track to reach a record high Thursday after the stock market opens.
