Following a spectacular quarterly earnings announcement on Wednesday, investors sent Meta’s shares skyrocketing after hours, suggesting that the company’s artificial intelligence expenditure binge is paying off.
Thanks to increased ad income and a growing user base on its primary social media platforms, the Menlo Park, California-based business handily exceeded Wall Street’s forecasts for the second quarter. The funds are being used to support the company’s enormous investments in AI research and development as well as the hire of elite people at outrageously high salaries.
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According to Forrester research director Mike Proulx, Meta has not only made observable progress in AI, but it is also assisting in future-proofing itself as a growing business in case the current antitrust lawsuit or shifting social media sentiment affects its family of apps.
A lawsuit that is currently pending a judge’s ruling could compel Meta to split out WhatsApp and Instagram, two firms that the company acquired over ten years ago and that have subsequently developed into dominant social media platforms.
During the April–June period, the corporation made $18.34 billion, or $7.14 per share. Compared to $13.47 billion, or $5.16 per share, during the same time last year, it represents a 36% increase.
Revenue increased from $39.07 billion to $47.52 billion, a 22% increase.
According to a FactSet poll, analysts predicted Meta will make $5.88 per share on $44.81 billion in revenue.
With 3.48 billion daily active users across its Facebook, Instagram, WhatsApp, Messenger, and Threads products, Meta saw a 6% increase in users year over year.
As it works on its AI objectives, Meta said it expects costs to rise as it invests billions in infrastructure and recruits highly paid workers. Expenses are expected to increase by 20% to 24% year over year to $114 billion to $118 billion in 2025.
In a recent display of his enthusiasm for AI, CEO Mark Zuckerberg shared his thoughts on personal superintelligence on Wednesday, stating that he thinks it will help humanity advance more quickly. Although he stated that superintelligence development is now in sight, he did not explain how this will be accomplished or what superintelligence actually entails.
Competing firms refer to the abstract concept of superintelligence as artificial general intelligence, or AGI. It’s the most recent change of direction for a tech giant who, in 2021, threw its weight behind the metaverse concept, rebranding the business and spending billions on developing virtual reality and associated technologies.
The goal of Meta is to enable everyone to possess personal superintelligence. According to Zuckerberg, “We believe in giving people this power to direct it towards what they value in their own lives.” This is in contrast to many in the industry who think that superintelligence should be focused on automating all worthwhile tasks so that humans can survive off of its product.
In a conference call, Zuckerberg stated that he thinks the primary method of integrating superintelligence will be through AI glasses.
Alexandr Wang, the CEO of the AI startup Scale, was hired last month to work on a superintelligence development team. In early June, the IT giant also signed a 20-year contract to help fulfill the growing demand for computer demands, including artificial intelligence.
With 75,945 workers at the conclusion of the quarter, Meta had grown by 7% from the previous year.
In after-hours trading, Meta’s shares increased $81.87, or 11.8%, to $777.08, putting it on course to hit a new high Thursday as the stock market opens.
