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Meta’s solid quarterly revenue and earnings growth and upbeat guidance sent shares up as much as 8 per cent on Wednesday, as the strength of its core advertising business offset Wall Street concerns over its heavy spending on artificial intelligence.
Revenues at Meta jumped 22 per cent to $39.1bn in the past three months, beating analysts’ expectations of $38.3bn and the high end of its own forecast, which was $39bn.
For the third quarter, it forecast revenues of $38.5bn to $41bn, topping estimates of a rise to $39.2bn.
However, the company also raised the bottom of its range of full-year capital expenditure guidance from between $35bn and $40bn to between $37bn and $40bn, as Meta continues to double down on its AI ambitions.
“We had a strong quarter, and Meta AI is on track to be the most-used AI assistant in the world by the end of the year,” said Mark Zuckerberg, Meta chief executive.
Wall Street has been concerned by the surge in AI spending at Big Tech groups such as Microsoft, given the costs of training and maintaining models, as well as investing in the infrastructure to underpin it.
Zuckerberg has been attempting to win over investors with his AI vision, particularly as he faces questions about when its new AI features will bring in profits and what the business models will look like. In its previous quarterly results in April, Meta raised the high end of its full-year capital expenditure guidance in order to boost its AI infrastructure and plans, sending shares tumbling more than 10 per cent as investors baulked at the added costs.
Shares of Meta, which are up more than 35 per cent year to date, were up 5 per cent at the time of publication after Wednesday’s results.