Meta turns green after posting $13.5 billion profit
Meta, the parent company of Facebook and Instagram saw its shares rise by about 7% after reporting a higher-than-expected $13.5 billion earnings for the most recent quarter.
Meta reported $39 billion in revenue for the April–June quarter, surpassing market estimates and up 22% from the same period last year, in its most recent financial report, which was released on Wednesday
The massive tech company headquartered in California anticipated revenue to range from $38.5 billion to $41 billion in the third quarter.
The company’s primary business, digital advertising, is continuing to acquire market share. Revenue from advertising increased by 22% over the previous year, mostly from the Facebook and Instagram apps. Top competitor Alphabet revealed last week that sales of Google ads increased by 11%, but estimates for YouTube were absent.
According to Meta, its spending for the second quarter came to $24.2 billion, which includes the $1.4 billion settlement it recently reached with the state of Texas over a case using face recognition data.
Mark Zuckerberg, the founder and CEO of Meta, stated, “We had a strong quarter and Meta AI is on track to be the most used AI assistant in the world by the end of the year.”
“We’ve launched the first open source AI model at the frontier level, our Ray-Ban Meta AI glasses are still gaining popularity, and our apps are growing at a healthy rate overall.”
Meta’s impressive gain follows the release of conflicting financial reports from a number of the tech behemoths that comprise the “magnificent seven” mega-cap firms.
This year, the shares have gained 31%, surpassing peers partly because of Meta’s comparatively low valuation. Trading at roughly 21 times expected profits, Meta is much less than the Nasdaq 100’s multiple of 25 times.
Nevertheless, a larger exodus from the sector has resulted in a recent decline in the stock, and a mistake in expenditure could prolong the selloff. An estimated one-day move of roughly 8.8%, is indicated by options data following the findings.
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