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Wall Street is projecting double-digit profit and sales growth from Facebook parent Meta Platforms, as the tech giant continues to ramp up its artificial intelligence efforts.
Meta is expected to report earnings per share of $5.21 when it posts third-quarter results after-the-bell Wednesday, according to estimates compiled by FactSet (FDS+0.46%). That’s a profit of $13.49 billion, up more than 16% from the year ago period.
Analysts are similarly projecting an 18% jump in sales from the same period last year to $40.19 billion for the quarter.
These results would be an early reflection of the tech giant’s ramped up AI efforts. This year alone, the company’s total spending is expected to hit between $35 billion and $40 billion, driven in large part by burgeoning AI costs, according to JPMorgan Chase (JPM+1.58%) analyst Doug Anmuth. That figure could reach $42 billion next year.
Chief executive Mark Zuckerberg showed how some of those investments have already begun to pay off at the company’s annual Connect conference in September. Zuckerberg said Meta AI is on track to become the most-used AI assistant in the world by the end of this year, with almost 500 million monthly active users as of today. Meta added the AI assistant to its popular social media platforms, including Instagram and Facebook (META+0.85%), in April.
Zuckerberg also announced Llama 3.2, Meta’s first open-source, multimodal large language model (LLM). The CEO said that the AI industry has reached an inflection point and that Llama has become “something of an industry standard.”
This has fueled a strong year for the company, with shares up roughly 67% year-to-date. A single share of Meta stock is valued at around $577, approaching an all-time high.
In a recent note, Jefferies (JEF+2.72%) analysts reiterated their belief in Meta’s ability to sustain double-digit revenue growth, pointing to a combination of higher engagement from AI investments, increased advertiser efficiency, and the ramping up of other monetization formats, including WhatsApp and Llama.