Here's Why Meta's Earnings Were Better-Than-Expected, According to CEO Mark Zuckerberg Meta stock reached a record high after the tech giant reported its second-quarter earnings on Wednesday.
By Sherin Shibu Edited by Melissa Malamut
Key Takeaways
- Meta reported financial results on Wednesday, showing that revenue was up 22% year-over-year.
- Meta executives credited AI for the revenue growth, stating that the technology allowed its advertising business to expand.
- On Thursday, Meta's stock reached a record high, driven by the earnings report.
Meta reported $47.52 billion in revenue for its second quarter ending in June on Wednesday, a 22% year-over-year increase and higher than the $44.8 billion analysts expected. On Thursday, Meta stock reached a record high of $784.75, surpassing the previous record close of $738.09 reached on June 30.
Meta CEO Mark Zuckerberg stated on a call on Wednesday with analysts that growth in the quarter was caused by the use of Meta's AI technology, which allowed the company to drive more advertising revenue.
Nicola Mendelsohn, head of global business group at Meta, echoed Zuckerberg's remarks. In a LinkedIn post on Wednesday, Mendelsohn wrote that the quarter's "strong performance was driven largely by AI, unlocking greater efficiency and gains across our ads system."
Related: Mark Zuckerberg Uses an Easy But Powerful Formula to Keep Facebook Relevant — Here's How It Works
At the time of writing, Meta's market value was $1.96 trillion, up about 11.5% on Thursday morning.
One contributor to Meta's surge in revenue was smart glasses. Meta released the Ray-Ban Meta frames in partnership with eyewear company EssilorLuxottica in October 2023. The device allows users to take photos, interact with Meta AI, and make calls. The glasses have sold more than two million pairs since launch, with EssilorLuxottica revealing in its earnings report earlier this week that sales of the frames more than tripled for the first half of the year compared to the same time last year.
The unexpected success of the Ray-Ban Metas prompted Meta to launch another pair, this time in partnership with Oakley, last month.
During Meta's second-quarter earnings call, Zuckerberg predicted that smart glasses would replace other gadgets as the "primary computing device," becoming the main method users interact with AI.
"I continue to think that glasses are basically going to be the ideal form factor for AI," Zuckerberg said on the call.
Meta CEO Mark Zuckerberg wears the Ray-Ban Meta glasses. Photo by Gilbert Flores/Variety via Getty Images
While Meta brought in more revenue than expected last quarter, the tech giant is also projecting to spend more on AI expenses.
Meta stated in the earnings report Wednesday that capital expenditures, including AI-related costs and payments on financial leases, would cost at least $66 billion this year, up from a previous forecast of at least $64 billion. Expenditures for the quarter were $17 billion.
Before the earnings report was revealed, Zuckerberg penned a blog post about his vision for AI — to bring superintelligence, or AI that surpasses human intellect, into the hands of every individual. The Meta CEO said he aims to give people "greater agency" to shape the world, contrasting his approach with "others in the industry" who believe that AI should first automate all work before humanity lives on a measured amount of its output.
Meta has heavily invested in superintelligence, offering new hires up to $200 million in compensation packages. Last month, Meta announced a new Superintelligence Labs team, assembling talent from AI companies like OpenAI, Google, and Anthropic to work on the effort.
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