Meta Platforms forecast third-quarter revenue well above Wall Street estimates on Wednesday, as artificial intelligence continued to strengthen its core promoting business, sending its shares up 10% in prolonged trading.
The corporate also raised the lower end of its capital expenses forecast for the 12 months.
The bumper results could ease investor worries, a minimum of for now, about Meta’s forecast that the year-over-year growth rate within the fourth quarter could be slower than within the third quarter. Investors also shrugged off the corporate’s comments on rising infrastructure and worker compensation costs, which Meta said would “end in a 2026 year-over-year expense growth rate that’s above the 2025 expense growth rate.”
For the third quarter, Meta said it expected total revenue of $47.5 billion to $50.5 billion, compared with analysts’ average estimate of $46.17 billion, in keeping with data compiled by LSEG. Its third-quarter guidance assumed a 1% profit from a weak dollar, it said in an announcement.
Meta expects each total expenses and capital expenditures to extend significantly in 2026, driven primarily by higher infrastructure costs and continued investment to support AI initiatives.
“AI-driven investments into Meta’s promoting business proceed to repay, bolstering its revenue as the corporate pours billions of dollars into AI ambitions like superintelligence,” said eMarketer senior analyst Minda Smiley. “But Meta’s exorbitant spending on its AI visions will proceed to attract questions and scrutiny from investors who’re desperate to see returns.”
Smiley added that Meta’s strong results signaled that the broader digital promoting market was not yet feeling the pain from tariffs.
U.S. antitrust regulators have sued Meta to force it to restructure or sell Instagram and WhatsApp, claiming the corporate sought to monopolize the marketplace for social media platforms used to share updates with family and friends. With court papers due in September, the judge overseeing the case is unlikely to rule until later this 12 months on the earliest.
Meta CEO Mark Zuckerberg testified in April that the corporate was initially slow to acknowledge the competitive threat of TikTok, and that Meta has through the years tried to construct many apps that never gained traction.
Meta said on Wednesday that while it was not providing an outlook for fourth-quarter revenue, the corporate expected the year-over-year growth rate within the period to be slower than within the third quarter.
The social media giant raised the lower end of its annual capital expenditures forecast by $2 billion, driven by its high-stakes push for “superintelligence” within the heated AI race.
The Facebook and Instagram parent now expects capital expenditures to be between $66 billion and $72 billion.
Training and deploying advanced AI systems remain a capital-intensive endeavor, requiring costly hardware, massive computing resources and top-tier engineering talent.
After a lackluster reception for its Llama 4 model that led to staff departures, Meta has tried to revitalize its AI push by sparking a high-stakes talent war wherein it has doled out greater than $100 million in pay packages to researchers from rival firms.
Zuckerberg has pledged to spend tons of of billions of dollars to construct massive AI data centers, having shelled out $14.3 billion for a stake in startup Scale AI and poached its 28-year-old billionaire CEO, Alexandr Wang.
To fund the push, the billionaire founder is leaning on Meta’s massive user base in addition to AI-powered improvements in content engagement that make it a stable bet for advertisers even in times of economic uncertainty.
The tech giant recently introduced an AI-driven image-to-video ad creation tool under its Advantage+ suite, allowing marketers to generate video ads from static images.
Instagram, whose Reels product competes with ByteDance’s TikTok and YouTube Shorts for ad dollars in the favored short video format, is ready to account for greater than half of Meta’s ad revenue within the U.S. this 12 months, in keeping with research firm eMarketer.
Meta has also accelerated efforts to monetize its social media platforms WhatsApp and Threads by integrating ads.
The corporate last month named insider Connor Hayes as head of Threads, an indication it was moving the platform away from Instagram’s shadow after leaning on the photo-sharing app for growth.
Meta reported record revenue of $47.52 billion for the quarter ended June 30, which surpassed analysts’ average estimate of $44.80 billion, in keeping with LSEG data.
Its profit per share of $7.14 for the second quarter also exceeded estimates of $5.92.
Meta Platforms forecast third-quarter revenue well above Wall Street estimates on Wednesday, as artificial intelligence continued to strengthen its core promoting business, sending its shares up 10% in prolonged trading.
The corporate also raised the lower end of its capital expenses forecast for the 12 months.
The bumper results could ease investor worries, a minimum of for now, about Meta’s forecast that the year-over-year growth rate within the fourth quarter could be slower than within the third quarter. Investors also shrugged off the corporate’s comments on rising infrastructure and worker compensation costs, which Meta said would “end in a 2026 year-over-year expense growth rate that’s above the 2025 expense growth rate.”
For the third quarter, Meta said it expected total revenue of $47.5 billion to $50.5 billion, compared with analysts’ average estimate of $46.17 billion, in keeping with data compiled by LSEG. Its third-quarter guidance assumed a 1% profit from a weak dollar, it said in an announcement.
Meta expects each total expenses and capital expenditures to extend significantly in 2026, driven primarily by higher infrastructure costs and continued investment to support AI initiatives.
“AI-driven investments into Meta’s promoting business proceed to repay, bolstering its revenue as the corporate pours billions of dollars into AI ambitions like superintelligence,” said eMarketer senior analyst Minda Smiley. “But Meta’s exorbitant spending on its AI visions will proceed to attract questions and scrutiny from investors who’re desperate to see returns.”
Smiley added that Meta’s strong results signaled that the broader digital promoting market was not yet feeling the pain from tariffs.
U.S. antitrust regulators have sued Meta to force it to restructure or sell Instagram and WhatsApp, claiming the corporate sought to monopolize the marketplace for social media platforms used to share updates with family and friends. With court papers due in September, the judge overseeing the case is unlikely to rule until later this 12 months on the earliest.
Meta CEO Mark Zuckerberg testified in April that the corporate was initially slow to acknowledge the competitive threat of TikTok, and that Meta has through the years tried to construct many apps that never gained traction.
Meta said on Wednesday that while it was not providing an outlook for fourth-quarter revenue, the corporate expected the year-over-year growth rate within the period to be slower than within the third quarter.
The social media giant raised the lower end of its annual capital expenditures forecast by $2 billion, driven by its high-stakes push for “superintelligence” within the heated AI race.
The Facebook and Instagram parent now expects capital expenditures to be between $66 billion and $72 billion.
Training and deploying advanced AI systems remain a capital-intensive endeavor, requiring costly hardware, massive computing resources and top-tier engineering talent.
After a lackluster reception for its Llama 4 model that led to staff departures, Meta has tried to revitalize its AI push by sparking a high-stakes talent war wherein it has doled out greater than $100 million in pay packages to researchers from rival firms.
Zuckerberg has pledged to spend tons of of billions of dollars to construct massive AI data centers, having shelled out $14.3 billion for a stake in startup Scale AI and poached its 28-year-old billionaire CEO, Alexandr Wang.
To fund the push, the billionaire founder is leaning on Meta’s massive user base in addition to AI-powered improvements in content engagement that make it a stable bet for advertisers even in times of economic uncertainty.
The tech giant recently introduced an AI-driven image-to-video ad creation tool under its Advantage+ suite, allowing marketers to generate video ads from static images.
Instagram, whose Reels product competes with ByteDance’s TikTok and YouTube Shorts for ad dollars in the favored short video format, is ready to account for greater than half of Meta’s ad revenue within the U.S. this 12 months, in keeping with research firm eMarketer.
Meta has also accelerated efforts to monetize its social media platforms WhatsApp and Threads by integrating ads.
The corporate last month named insider Connor Hayes as head of Threads, an indication it was moving the platform away from Instagram’s shadow after leaning on the photo-sharing app for growth.
Meta reported record revenue of $47.52 billion for the quarter ended June 30, which surpassed analysts’ average estimate of $44.80 billion, in keeping with LSEG data.
Its profit per share of $7.14 for the second quarter also exceeded estimates of $5.92.
