Meta's earnings beat expectations, and revenue forecasts are optimistic, resulting in a 6% increase in share price.

• On Thursday, Meta's shares rose following the release of its better-than-anticipated second-quarter earnings and optimistic outlook.
• The company's heavy spending on AI is already beginning to yield results, as demonstrated by the meta executives.
• According to a report by Baird's analysts, Meta's business remains robust due to the years of AI-related investments.

On Thursday, the company's shares experienced a 6% increase following the release of its second-quarter earnings report, which surpassed analysts' expectations and provided an optimistic revenue outlook.

Meta reported a 22% increase in revenue to $39.07 billion from $32 billion in the previous year, despite analysts predicting $38.31 billion, according to LSEG.

The company's net income increased by 73% to $13.47 billion, or $5.16 per share, from $7.79 billion, or $2.98 per share, in the same period last year, due to cost-cutting initiatives that began in late 2022. The company was predicted to report earnings per share of $4.73.

Meta anticipates revenue of $39.75 billion for the third quarter, which is higher than the average analyst forecast of $39.1 billion.

The company's spending on artificial intelligence is yielding positive results, as stated by Meta CEO Mark Zuckerberg and finance chief Susan Li to investors.

"Zuckerberg stated on the earnings call that the AI work being done by Facebook will improve the effectiveness of recommendations, help people find better content, and make advertising experiences more efficient. These products are already at scale, and there is significant potential for growth."

According to Baird's analysts, Meta's business remains robust due to its long-term investments in AI technology.

The report stated that Meta's recent advancements in AI will enable the generation of revenue through increased ad conversions, the development of new digital assistants, and the creation of multimodal content.

On Wednesday, the analysts recommended changing the ticker to 'AIAI'.

Meta is the top AI play in consumer internet, according to Bank of America analysts, who reported evidence of strong ad growth and growing core app users, particularly among younger audiences.

The analysts observed that Meta's capital expenditures are rising due to AI infrastructure spending, but it is resulting in tangible business outcomes. Additionally, they noted that newer generative AI products could create revenue opportunities that last for several years.

The low end of the capital expenditures range for the year has been revised to $37 billion from the previous $35 billion.

Meta is reportedly performing exceptionally well in the field of digital advertising, according to a note written by Barclays analysts on Wednesday.

The Barclays analysts wrote that the investment community is currently giving META and other hyperscalers a pass on what appears to be an AI capex overbuild, but this will result in the introduction of new and exciting products that are not included in revenue forecasts.

— CNBC's Michael Bloom and Jonathan Vanian contributed to this report

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