Meta’s dedication to advancing artificial intelligence has garnered positive returns from investors, evidenced by a surge in its stock price following the release of a robust quarterly earnings report. The company, headquartered in Menlo Park, California, surpassed Wall Street predictions for the second quarter, fueled by increased advertising revenue and an expanding user base across its major social media platforms. These revenues are facilitating Meta’s substantial investments in AI development and the recruitment of top-tier talent with significant compensation.
According to Mike Proulx, a research director at Forrester, Meta’s notable progress in AI not only propels its growth but also acts as a preventive measure against potential challenges from the ongoing antitrust lawsuits or shifts in social media popularity dynamics. The antitrust case in question, pending a judicial decision, might compel Meta to divest from WhatsApp and Instagram, platforms it acquired over a decade ago that have since evolved into significant industry players.
In the April to June period, Meta reported earnings of $18.34 billion, equating to $7.14 per share, a 36% increase from $13.47 billion, or $5.16 per share, in the same timeframe the previous year. Revenue surged by 22% to reach $47.52 billion, compared to $39.07 billion before. Analysts had forecasted Meta’s earnings to be $5.88 per share on $44.81 billion in revenue, as indicated by a FactSet survey.
Meta’s daily active users across its suite of applications, including Facebook, Messenger, WhatsApp, Instagram, and Threads, reached 3.48 billion, marking a 6% rise year-over-year. However, the company anticipates increased expenditure as it channels billions into infrastructure and securing highly paid employees dedicated to realizing its AI goals. Projected expenses for 2025 are estimated to be between $114 billion and $118 billion, representing a 20% to 24% rise from the previous year.
CEO Mark Zuckerberg continues to show his dedication to AI, outlined in a note expressing his perspective on “personal superintelligence,” which he surmises could accelerate human progress. Although the development of superintelligence is within reach, Zuckerberg refrained from specifying the methods or explicit definitions of the term. The notion of superintelligence is akin to what competitors label as artificial general intelligence (AGI), marking a shift for a tech figure who, in 2021, embraced the metaverse by renaming the company and investing heavily in virtual reality advancements.
Zuckerberg articulated Meta’s ambition to democratize personal superintelligence, democratizing its benefits so individuals can utilize it per their values, contrary to other industry players who envision a centralized approach automating crucial tasks. Additionally, he highlighted AI glasses as a probable fundamental tool in integrating superintelligence during a conference call.
Recently, Meta invested $14.3 billion in AI firm Scale, enlisting its CEO, Alexandr Wang, to participate in a team working on superintelligence projects. In June, Meta secured a 20-year agreement for nuclear power to accommodate rising demand for AI and other computing resources. As of the quarter’s end, Meta employed 75,945 individuals, marking a 7% increase from the prior year.
Meta’s shares appreciated by $81.87—or 11.8%—reaching $777.08 in after-hours trading, setting the stage for a record high once the stock market resumes activity on Thursday.