Meta's Bold AI Ambitions: Capital Overflow and Share Surge
Meta Platforms has forecast third-quarter revenue surpassing Wall Street expectations and raised its annual capital expenditure forecast. The company plans to intensify its AI endeavors, funding them through improved ad content and a massive user base. Instagram's Reels product is also a significant contributor to ad revenue.
Meta Platforms has projected third-quarter revenues that exceed Wall Street predictions, boosting its shares by 10% after-hours. The company now anticipates earning between $47.5 billion and $50.5 billion, outperforming the analyst consensus of $46.17 billion. Additionally, Meta has increased the lower end of its capital expenditure forecast for 2023.
Driven by its commitment to AI development, Meta expects annual capital expenses to range between $66 billion and $72 billion. Despite underwhelming feedback on its Llama 4 AI model, Meta reinvigorated its AI projects by attracting top talent and pouring resources into AI infrastructure and data centers.
Instagram, particularly its Reels feature, is poised to generate over half of Meta's U.S. ad income this year. The company aims to diversify ad revenue through these platforms, reinforcing its appeal as a reliable marketing venue amid economic uncertainty.
(With inputs from agencies.)
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