Meta’s Earnings Top Estimates as It Lifts Spending Projections

Meta Platforms (META) reported third-quarter earnings that beat analyst estimates as demand for artificial intelligence (AI) increases, and raised its estimate for how much money it plans to spend this year as it invests in the emerging technology.

The parent company of Facebook and Instagram reported revenue of $40.59 billion, up from $34.15 billion at the same time last year and higher than the $40.27 billion that analysts had expected, according to estimates compiled by Visible Alpha. Meta reported $15.69 billion in net income, up from $11.58 billion and better than analysts’ expectations of $13.58 billion.

Meta raises its minimum spending forecast as it invests in AI

Advertising revenue, which represents the bulk of Meta’s revenue, rose 18.6% to $39.89 billion, slightly above estimates of $39.56 billion, benefiting from the tech giant’s progress in artificial intelligence.

“We had a good quarter driven by AI advancement across our apps and business,” CEO Mark Zuckerberg said in a statement, adding that the company also saw “strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”

The findings come as many big tech companies, including Meta, face intense pressure to show that the billions of dollars they spend on artificial intelligence will boost results. The company raised the bottom range of its full-year capital expenditure forecast to $38 billion to $40 billion, from $37 billion to $40 billion previously as Meta invests in artificial intelligence.

Meta said that it expects revenues in the fourth quarter to range between $45 billion and $48 billion, and analysts expect about $46.34 billion.

Meta shares fell 0.8% in extended trading after the release. They are up 67% for 2024 through Wednesday’s close.