AI Boosts Ad Revenue: Meta's Q2 Income Surges 11% Exceeding Expectations, Stock Jumps Over 7% After-Hours

- Continued investments in AI and the Metaverse will lead to higher expenses next year. The Metaverse business is expected to experience significant losses next year.
During Q2, Meta made significant breakthroughs in AI development. In April, media reported that Meta would launch an AI advertising tool before the end of the year. Meta's Chief Technology Officer, Andrew Bosworth, stated that the AI tool would generate advertising images to help the company create different images targeting various audiences. In May, Meta open-sourced the multi-sensory AI model, ImageBind. The company also introduced its first-generation AI inference accelerator, the AI-customized chip MTIA. Additionally, Meta launched the large-scale multilingual speech project, MMS, in June. Furthermore, media reports indicated that the "Android moment" of AI large models was imminent, as Meta aimed to commercialize the open-source research tool, Large Language Model LLaMA, which was released in February this year. Last week, Microsoft announced a collaboration with Meta, releasing the commercially available version of Llama 2, providing enterprises with alternative products to OpenAI and Google models.
- Both advertising and app revenue exceeded expectations, growing nearly 12%, while Metaverse revenue fell short of expectations, declining by 39%.
- Facebook's daily active users reached an all-time single-quarter high, and monthly active users surpassed 3 billion for the first time in history.
- Q3 revenue guidance is higher than expected, with full-year expense guidance increased by $2 billion due to restructuring costs, including layoffs, estimated at $4 billion.
- Capital expenditure guidance for this year is reduced by $3 billion, saving costs on non-AI servers.