Earnings Report Preview | AI Boosts Advertising Business, Meta's Stock Price Expected to Rise Again

Zhitong
2024.10.28 08:38
portai
I'm PortAI, I can summarize articles.

Social media giant Meta is set to announce its latest financial results after the close of trading on Wednesday, with the market widely expecting it to continue its strong performance. Analysts predict that third-quarter revenue will reach $40.25 billion, an increase of nearly 18% year-on-year, with a net profit expected to be $13.56 billion. Thanks to AI technology, Meta's advertising business has seen significant improvement, leading to a rise in stock price. Analysts at Deutsche Bank believe that AI optimization will continue to drive growth in advertising revenue, with Wall Street expecting third-quarter advertising revenue to be $39.54 billion. Meta's stock price has already risen by over 60%

According to the Zhitong Finance and Economics APP, social media giant Meta (META.US) is set to announce its latest financial results after the close of trading on Wednesday, with the market generally expecting it to continue its strong performance this year. Analysts predict that Meta's third-quarter revenue is expected to reach $40.25 billion, an increase of nearly 18% year-on-year, with a net profit estimated at $13.56 billion, or $5.20 per share, compared to $11.58 billion ($4.39 per share) in the same period last year.

It is understood that thanks to the optimization of user engagement through artificial intelligence (AI) technology, Meta's advertising business has seen significant growth, leading to a rise in its stock price. Analysts at Deutsche Bank predict that Meta's AI optimization efforts will continue to drive growth in advertising revenue.

In the second quarter, Meta's advertising revenue reached $38.33 billion, and Wall Street expects its third-quarter advertising revenue to be $39.54 billion. CEO Mark Zuckerberg stated in July that Meta AI is expected to become the world's most popular AI assistant by the end of the year.

In September, Meta launched the powerful open-source AI model Llama 3.2 to compete with rivals such as OpenAI supported by Microsoft, Google under Alphabet, and Anthropic supported by Amazon.

Analysts at Bank of America have rated Meta as their "top AI company" ahead of the company's earnings conference call, emphasizing the strong growth of its core advertising business, the increase in usage of its core applications among young users, and the capabilities of the company's large language models.

Among the 31 analysts tracked by Visible Alpha, all but one have given Meta a "buy" or equivalent rating, with an average target price of $612.34, indicating a potential increase of about 7% from Friday's closing price. Meta's stock price has risen by over 60% so far this year, closing at $573.25 last Friday

Source: Zhitong The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.