(Bloomberg):Meta Platforms, the parent company of Facebook, reported sales for the fourth quarter (April-June) that exceeded market expectations. This confirmed that the company’s large investment in artificial intelligence (AI) is contributing to increased sales of targeted personalized advertising. The company’s stock price rose by about 10% at one point in after-hours trading on the U.S. stock market on July 31, and has since risen by around 5%.

Meta reported sales of $39.1 billion in the second quarter, compared with analysts’ estimates of $38.34 billion in a Bloomberg survey.

It said it expected third-quarter sales of $38.5 billion to $41 billion, compared with analysts’ estimates of $39.2 billion.

The company said it was using AI to improve how it matches ads with interested users, making its most profitable advertising business more efficient.

Meta Chief Executive Officer Mark Zuckerberg is also investing heavily in data centers and computing power to position himself as a leader in the race to AI. Meta raised the lower end of its full-year capital spending forecast range by $2 billion to $37 billion to $40 billion.

Meta is investing in large language models (LLMs), the technology that underpins AI chatbots. The company recently announced Llama 3.1, the latest version of its open-source LLM that is more powerful at processing data, and Zuckerberg said it has invested heavily in computing power to train it.

Meta has also poured huge amounts of money into the Metaverse business, which is Zuckerberg’s focus, but since it is far from turning a profit, investors are paying close attention to whether the investment in its AI business will pay off.

Zuckerberg said in a July 31 presentation that if Meta’s chatbot, Meta AI, continues on its current pace, it will become the most used chatbot in the world by the end of the year, but he urged investors to be patient.

The number of daily users across all apps in the April-June quarter was 3.27 billion, up 7% from the same period last year.

Original title: Meta Sales Beat Estimates on Advertising Growth; Shares Jump (2), Meta Sales Beat Estimates on Advertising Growth; Shares Jump (1), Meta Sales Surpass Estimates on Advertising Growth; Shares Jump (excerpt)

(Updated with stock price trends, etc.)

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