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While Meta is pursuing the same AI technology advancements as its rivals, analysts say Meta’s AI-driven revenue growth does a better job of explaining why AI is important to the bottom line. Increase investor confidence And it’s pushing up stock prices.
Meta has outperformed major technology companies such as Google parent Alphabet, Apple and Microsoft in share price gains since the start of the year. 53% As of writing, it’s up 1.5% year to date, compared with roughly 20% for Alphabet, 22% for Apple, and 12% for Microsoft.
Meta also Sales: $39.1 billion Revenue for the quarter ended June 30 beat analyst expectations of $38.3 billion. By contrast, Meta’s competitors Amazon, Microsoft and Alphabet reported second-quarter earnings of Didn’t live up to Wall Street expectationsInvestors I wanted to see Billions of dollars in AI investments are paying off, with increased sales balancing expenses.
analysts told Bloomberg. Meta CEO Mark Zuckerberg said Thursday that he had done a better job touting the benefits of AI than any other major tech CEO during the company’s July earnings call. The key to Meta turning AI into revenue was a clear area of ​​impact: AI helped grow Meta’s advertising business, which accounted for a third of the company’s revenue. 98% of the company’s revenue Last quarter.
Related: Nvidia CEO Jensen Huang calls Mark Zuckerberg’s vision for the future of AI a ‘home run idea’
“[Meta] “It’s arguably better articulated its vision for AI integration than its competitors,” investment strategist Andrew Ye told Bloomberg.
Nearly all of Meta’s millions of advertisers use at least one of Meta’s AI-powered advertising tools, and AI-powered content recommendations help keep users’ attention longer and increase advertising revenue.
“Across Facebook and Instagram, advancements in AI continue to improve the quality of recommendations and drive engagement,” Zuckerberg said in the earnings call. Transcript.
Related: Mark Zuckerberg says Apple’s ‘constrained’ platform is ‘key reason’ for pushing open source AI
Zuckerberg said AI will be used to create personalized content for advertisers “in the coming years.” Meta is working toward a future where advertisers only need to know their business goals and budget, and Meta will handle the rest with the help of AI.
Meta CEO Mark Zuckerberg. Photographer: Sungjun Cho/Bloomberg via Getty Images
Zuckerberg expects AI to drive revenue in 2025 and 2026 by continuing to enhance existing products like content recommendations and advertising.
“My view is that as a fundamental part of AI, it will ultimately impact almost every product that we have in some way,” he said on the conference call.
Building AI infrastructure is costly, with each AI model costing over $100 million to develop. Zuckerberg revealed: Meta’s Largest AI Model The game, which was released in July, has cost hundreds of millions of dollars in development to date.
Related: New Google report reveals hidden costs of AI
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