Meta Platforms forecast third-quarter income nicely above Wall Road estimates on Wednesday, as synthetic intelligence continued to strengthen its core promoting enterprise, sending its shares up 10% in prolonged buying and selling.
The corporate additionally raised the decrease finish of its capital bills forecast for the 12 months.
The bumper outcomes may ease investor worries, no less than for now, about Meta’s forecast that the year-over-year development fee within the fourth quarter could be slower than within the third quarter. Buyers additionally shrugged off the corporate’s feedback on rising infrastructure and worker compensation prices, which Meta stated would “result in a 2026 year-over-year expense growth rate that is above the 2025 expense growth rate.”
For the third quarter, Meta stated it anticipated complete income of $47.5 billion to $50.5 billion, in contrast with analysts’ common estimate of $46.17 billion, in line with information compiled by LSEG. Its third-quarter steerage assumed a 1% profit from a weak greenback, it stated in a press release.
Meta expects each complete bills and capital expenditures to extend considerably in 2026, pushed primarily by greater infrastructure prices and continued funding to assist AI initiatives.
“AI-driven investments into Meta’s advertising business continue to pay off, bolstering its revenue as the company pours billions of dollars into AI ambitions like superintelligence,” stated eMarketer senior analyst Minda Smiley. “But Meta’s exorbitant spending on its AI visions will continue to draw questions and scrutiny from investors who are eager to see returns.”
Smiley added that Meta’s sturdy outcomes signaled that the broader digital promoting market was not but feeling the ache from tariffs.
U.S. antitrust regulators have sued Meta to drive it to restructure or promote Instagram and WhatsApp, claiming the corporate sought to monopolize the marketplace for social media platforms used to share updates with family and friends. With courtroom papers due in September, the choose overseeing the case is unlikely to rule till later this 12 months on the earliest.
Meta CEO Mark Zuckerberg testified in April that the corporate was initially sluggish to acknowledge the aggressive menace of TikTok, and that Meta has through the years tried to construct many apps that by no means gained traction.
Meta stated on Wednesday that whereas it was not offering an outlook for fourth-quarter income, the corporate anticipated the year-over-year development fee within the interval to be slower than within the third quarter.
The social media large raised the decrease finish of its annual capital expenditures forecast by $2 billion, pushed by its high-stakes push for “superintelligence” within the heated AI race.
The Fb and Instagram mother or father now expects capital expenditures to be between $66 billion and $72 billion.
Coaching and deploying superior AI methods stay a capital-intensive endeavor, requiring pricey {hardware}, large computing sources and top-tier engineering expertise.
After a lackluster reception for its Llama 4 mannequin that led to employees departures, Meta has tried to revitalize its AI push by sparking a high-stakes expertise warfare through which it has doled out greater than $100 million in pay packages to researchers from rival corporations.
Zuckerberg has pledged to spend a whole lot of billions of {dollars} to construct large AI information facilities, having shelled out $14.3 billion for a stake in startup Scale AI and poached its 28-year-old billionaire CEO, Alexandr Wang.
To fund the push, the billionaire founder is leaning on Meta’s large consumer base in addition to AI-powered enhancements in content material engagement that make it a secure guess for advertisers even in instances of financial uncertainty.
The tech large not too long ago launched an AI-driven image-to-video advert creation instrument beneath its Benefit+ suite, permitting entrepreneurs to generate video advertisements from static photographs.
Instagram, whose Reels product competes with ByteDance’s TikTok and YouTube Shorts for advert {dollars} within the common brief video format, is ready to account for greater than half of Meta’s advert income within the U.S. this 12 months, in line with analysis agency eMarketer.
Meta has additionally accelerated efforts to monetize its social media platforms WhatsApp and Threads by integrating advertisements.
The corporate final month named insider Connor Hayes as head of Threads, an indication it was transferring the platform away from Instagram’s shadow after leaning on the photo-sharing app for development.
Meta reported report income of $47.52 billion for the quarter ended June 30, which surpassed analysts’ common estimate of $44.80 billion, in line with LSEG information.
Its revenue per share of $7.14 for the second quarter additionally exceeded estimates of $5.92.
