Meta Shares Jump After Strong Third-Quarter Sales Forecast

The Meta store in Burlingame, California. Photographer: David Paul Morris/Bloomberg Photo by David Paul Morris /Bloomberg

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(Bloomberg) — Meta Platforms Inc. topped projections for second-quarter sales and gave a stronger-than-expected forecast for the current period, a sign that the social media company’s advertising business is still growing quickly enough to support aggressive spending on artificial intelligence. 

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Shares jumped as much as 10% in late trading. Third-quarter sales will be $47.5 billion to $50.5 billion, Meta said in a statement Wednesday, with the midpoint of that range exceeding the average analyst estimate of $46.2 billion, according to data compiled by Bloomberg. The social media giant, which owns Instagram and Facebook, reported second-quarter revenue of $47.5 billion.

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Meta lifted the low end of its forecast for 2025 capital expenditures as it continues to invest heavily in the talent, infrastructure, data centers and energy needed to compete in a fast-moving AI race. The company now expects to spend $66 billion to $72 billion this year. The projection was adjusted higher in April to account for ongoing trade disputes and AI investments.

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Meta stock was up 18.7% so far this year before Wednesday’s report.

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Chief Executive Officer Mark Zuckerberg is spending to build new data centers and lure top AI researchers with compensation packages valued at hundreds of millions of dollars, Bloomberg has reported. Meta recently restructured its internal AI division, now referred to as Meta Superintelligence Labs, in an effort to build human-level AI capabilities and apply that technology across the company’s products. The group is led by Alexandr Wang, the former CEO of data labeling company Scale AI, who joined Meta in June after Zuckerberg paid $14.3 billion for a 49% stake in the company.

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Zuckerberg has said Meta has the ability to spend aggressively to grow its slice of the AI market thanks to the company’s consistent advertising business.   

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“I believe deeply in building personal superintelligence for everyone,” Zuckerberg said Wednesday in a video posted to Instagram. “At Meta, we have the resources to build the massive infrastructure required, and the ability to deliver new technology to billions of people.”  

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Meta’s competitors are also choosing to spend more now — and grow while businesses and consumers are forming their AI habits — rather than miss out. Last week, Alphabet Inc. raised its full-year capital expenditure forecast to $85 billion due to higher AI spend. 

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“In some ways, this race is historically akin to the races for the PC, web browser, search engine, and smartphone,” Mike Proulx, an analyst for Forrester, wrote in an emailed statement. “But the big difference is that this race is pacing so much faster because AI — the very thing that Meta and others are racing towards — helps to accelerate itself.” Proulx added that to win the AI race, companies will need to reach into their “deep pockets.” 

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(Updates with revenue in the second paragraph.)

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