Meta’s third-quarter gain surges 35% reflecting powerful ad turnover and its AI push

Meta Platforms Inc. posted stronger-than-expected third-quarter results on Wednesday fueled by its advertising turnover growth and its push to incorporate artificial intelligence.

But the Instagram and Facebook parent corporation warned that it expects a “significant acceleration” in infrastructure spending next year as it continues to pour money into developing AI.

For the three months ended on Sept. 30, the Menlo Park, California-based corporation earned $15.69 billion, or $6.03 per distribute, up 35% from $11.58 billion, or $4.39 per distribute, in the same period a year earlier.

turnover rose 19% to $40.59 billion from $34.15 billion.

Analysts, on average, were expecting returns of $5.22 per distribute on turnover of $40.21 billion, according to FactSet Research.

“We had a excellent quarter driven by AI advancement across our apps and business,” CEO Mark Zuckerberg said in a statement. “We also have powerful momentum with Meta AI, Llama adoption, and AI-powered glasses.”

For the current quarter, Meta is forecasting turnover of $45 billion to $48 billion. Analysts are expecting $46.18 billion.

“Meta’s solid quarter adds further evidence to the view that digital advertisers are choosing to spend their monetary schedule on the so-called trade leaders, such as Facebook and Instagram, at the expense of the smaller social media networks, like Snap,” said Investing.com analyst Jesse Cohen.

Cohen added that while AI is “clearly driving growth” at Meta, “investors appear to be disappointed over the corporation’s forward guidance and rising costs needed to develop AI features.”

Meta said it expects 2024 operating losses at its Reality Labs segment — which includes its virtual- and augmented-reality glasses — will “boost meaningfully” due to product advancement costs and other investments. Last Month, Meta teased a prototype for Orion, the holographic augmented reality glasses it’s been working on for a decade. But Orion doesn’t have a release date yet, in large part because it is currently so expensive to make. Zuckerberg called it a “glimpse of the upcoming.”

Meta’s shares slipped about 2% in after-trade buying and selling following the returns update.