Meta Platforms signaled that robust digital ad spending on its social media platforms will offset the price of its AI investments by exceeding market estimates for its second-quarter revenue on Wednesday and providing an optimistic sales prediction for the third quarter.
Meta reported! earnings of $5.16 per share on revenue of $39.07 billion for the quarter ended June 30, beating forecasts of $4.70 per share and $38.26 billion.
3.27 billion people were Daily Active (DAP), up 7% from the same time last year.
In premarket trade Thursday, shares of Facebook’s parent company rose 7 percent.
Capital expenditures (capex) increased, from $6.72 billion in Q1 to $8.47 billion in Q2. Operating profit improved 9 points, from 29% to 38%, despite a 7% increase in expenses as a result of a significant increase in sales during the second quarter.
In the third quarter, Meta beat Wall Street’s forecast of $39.09 billion by estimating total revenue between $38.5 billion and $41 billion, with a midpoint of $39.75 billion.
The business also said it will continue to invest heavily in AI infrastructure, increasing its earlier estimate of $35 billion to $40 billion in capital spending by 2024 to $37 billion to $40 billion.
Meta estimated total spending for the year between $96 billion and $99 billion, but issued a warning that infrastructure spending will remain a “key driver” of spending growth in 2025.
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