Meta Achieves Strong Financial Results Thanks to AI Investments
Meta announced better-than-expected sales in the second quarter,
indicating that the company’s substantial investments in artificial intelligence are
helping to enhance and personalize ad targeting.
As a result, the company’s shares surged by nearly 10% at the close of today’s trading session.
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Massive Investments
Positive Impact
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Meta, the parent company of Facebook and Instagram, reported sales of $39.1 billion for the quarter ending June 30, surpassing analysts’ estimates of $38.34 billion, according to Bloomberg data. Meta noted that AI is helping to improve how ads reach interested users, thereby increasing the efficiency and profitability of its business.
Massive Investments
Massive Investments in AI and Infrastructure
Meta expects its sales for the current quarter to range between $38.5 billion and $41 billion, compared to the average estimate of $39.2 billion. Additionally, the company is making significant investments in data centers and computing power, as CEO Mark Zuckerberg aims to strengthen the company’s position in the industry’s AI race.
Meta has updated its capital expenditure forecast for 2024, setting a new range of $37 billion to $40 billion, raising the lower end of the range by $2 billion. The company is investing in developing large language models that support AI-driven chatbots and recently unveiled its largest model to date, which cost hundreds of millions of dollars to train.
Positive Impact
Positive Impact on Meta AI Chatbot Program
In a press release on Wednesday, Zuckerberg stated that the company’s chatbot program,
Meta AI, is on track to become the world’s most widely used chatbot by the end of the year.
However, he urged investors to be patient, noting that the financial returns from this technology could take years to materialize.
In an earlier interview with Bloomberg this month, Zuckerberg said,
“I believe there’s a significant chance that we might look back and say we could have spent billions more than we did,
given that many companies are overbuilding right now.
” He added, “On the other hand, I think all the companies investing are making a rational decision because the downside of falling behind is missing out on the most important technology over the next 10 to 15 years.”
Meta Achieves Strong Financial Results Thanks to AI Investments