Meta’s Better Earnings Estimates as They Raise Cost Forecasts

Metaplatforms (META) reported third-quarter earnings that beat analysts’ estimates, driven by growth artificial intelligence (AI) demand and raised its estimate of how much money it plans to spend this year on investments in new technologies.

The parent company of Facebook and Instagram reported revenue of $40.59 billion. incomecompared to $34.15 billion in the same period last year and up from $40.27 billion. analysts expectedEstimated by Visible Alpha. Meta earned $15.69 billion. net profitdown from $11.58 billion and better than analysts’ forecast of $13.58 billion.

Meta raises the lower end of its spending forecast by investing in AI

Advertising revenue, which makes up the bulk of Meta’s revenue, rose 18.6% to $39.89 billion, slightly above estimates of $39.56 billion, helped by the tech giant’s advances in artificial intelligence.

“We had a strong quarter driven by advances in artificial intelligence across our apps and business,” CEO Mark Zuckerberg said in a press release, adding that the company also saw “strong momentum from Meta AI, the introduction of Llama and AI-powered glasses ”

The findings come as several major tech companies, including Meta, face intense pressure to demonstrate they spend billions of dollars on AI will improve results. The company raised the lower end of its full-year forecast. capital costs to $38–40 billion, from $37 to $40 billion previously, as Meta invests in AI.

Meta said it expects fourth-quarter revenue of between $45 billion and $48 billion, with analysts expecting about $46.34 billion.

Meta shares were down 0.8% in extended trading after the report. By Wednesday’s close, they were up 67% for 2024.