Meta Platforms Inc. reported robust third-quarter results, surpassing expectations with a strong performance driven by advertising revenue growth and advancements in artificial intelligence. The company, known for its popular platforms Instagram and Facebook, cautioned investors about an anticipated surge in infrastructure spending next year as it continues to invest heavily in AI development.
For the quarter ending on Sept. 30, the Menlo Park-based company recorded earnings of $15.69 billion, or $6.03 per share, marking a 35% increase from the same period last year. Revenue also saw a significant uptick, rising by 19% to $40.59 billion from $34.15 billion. Analysts had predicted earnings of $5.22 per share on revenue of $40.21 billion.
CEO Mark Zuckerberg highlighted the company's progress in AI integration across its apps and business, emphasizing momentum in Meta AI, Llama adoption, and AI-powered glasses. Meta's revenue forecast for the current quarter ranges between $45 billion to $48 billion, slightly above analysts' expectations of $46.18 billion.
Investing.com analyst Jesse Cohen noted that Meta's strong performance underscores the trend of digital advertisers favoring established platforms like Facebook and Instagram over smaller social media networks like Snap. While AI remains a key driver of growth for Meta, investors expressed concerns over the company's future expenses related to AI development.
Meta disclosed that operating losses at its Reality Labs segment, encompassing virtual- and augmented-reality glasses, are projected to rise significantly in 2024 due to ongoing product development and investments. The company recently unveiled a prototype for Orion, its holographic augmented reality glasses, which Zuckerberg described as a 'glimpse of the future.' However, the high production costs have delayed a release date for Orion.
Following the earnings report, Meta's shares experienced a slight decline of about 2% in after-market trading, reflecting investor sentiment regarding the company's financial outlook and escalating AI-related expenses.
