Meta Platforms projected stronger-than-expected holiday quarter sales, and touted artificial intelligence (AI) improvements to its core advertising business. But it wasn’t enough to satisfy Wall Street.
Meta told investors on Wednesday (Oct 30) that revenue for the current quarter would be between US$45 billion and US$48 billion. Analysts were expecting fourth-quarter revenue of US$46 billion. Shares were little changed in late trading.
The social networking giant also reported sales of US$40.6 billion for the period ended Sep 30, a jump of 19 per cent over one year prior, and just above the US$40.3 billion average estimate from Wall Street analysts. Chief executive Mark Zuckerberg credited the company’s AI investments for boosting revenue.
Zuckerberg has repeatedly touted the company’s steep investments in AI, which has helped change investor perception about the social media company. Meta stock was up more than 67 per cent this year at market close on Wednesday, making it one of the best performing stocks in the S&P 500.
Meta’s key AI products include several large language models used to power chat bots, an AI assistant built into its various social apps, and AI-powered smart glasses.
Even though many of Meta’s long-term AI investments are still years away from contributing meaningful revenue, Meta has leaned on AI advancements to improve its ad targeting and content recommendations, which have had a more immediate impact on business results. BLOOMBERG
