"Zuckerberg and Meta Chief Financial Officer Susan Li spent much of the call suggesting that Meta's AI investments are paying off now and will in the future by helping the company better target ads and content. Revenue rose 26% to $51.2 billion in the third quarter, signaling that Meta's core advertising business, which generates about 98% of that revenue, remains strong."
"The Meta CEO wasn't concerned that the social media company may build more data centers and computing capacity than it needs for its AI ambitions, even though it doesn't have a cloud services business like rivals Microsoft Corp. and Alphabet Inc.'s Google. If Meta develops too much computing power, he said, the excess capacity could improve the core business or it will find a way to sell it. Zuckerberg's bigger point: I think that it's the right strategy to aggressively front-load building capacity."
Meta will increase AI spending and expand computing capacity next year, with capital expenditures expected to be notably larger than in 2025 when spending may reach as much as $72 billion. AI investments are improving ad and content targeting and are expected to continue benefiting the company. Third-quarter revenue rose 26% to $51.2 billion, and guidance for the current period is $56 billion to $59 billion versus analyst estimates around $57.4 billion. Excess computing capacity could be repurposed or sold, and an aggressive front-loaded capacity strategy is planned. Shares fell about 8% in after-hours trading.
Read at www.mercurynews.com
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