Meta Platforms, the parent company of popular platforms like Facebook, Instagram, WhatsApp, and Threads, has undergone significant transformations in recent years. While social media continues to be its primary driving force, Meta, formerly known as Facebook (ticker: META), has positioned itself as a dominant player in the metaverse. Moreover, the company has embarked on an ambitious plan to improve efficiency, eliminating over 20,000 jobs to enhance profitability. However, Meta’s CEO Mark Zuckerberg has once again shifted his focus, and this time it’s all about artificial intelligence (AI).
On Wednesday, when Meta announces its second-quarter results after the market closes, several key topics will take center stage. With the stock surging approximately 145% this year alone, there is heightened anticipation surrounding the company’s performance.
One area of interest is the recent belief on Wall Street that the online advertising landscape is stabilizing. This positive development could potentially fuel a stronger financial performance than initially anticipated. Meta’s revenue forecast for the quarter ranges between $29.5 billion and $32 billion. The consensus among analysts stands at $31 billion, signaling an 8% growth compared to the 3% from the previous quarter. Furthermore, experts predict earning per share to be $2.89, a significant increase from the $2.46 reported in the same quarter last year.
Mizuho analyst James Lee notes in an earnings preview that the conditions seem favorable for Meta’s upcoming results. Recent feedback from advertising agencies indicates a positive outlook. Lee even suggests that Meta could achieve double-digit growth in its top-line performance during the second half of the year.
Meta Platforms continues to adapt and evolve, solidifying its position as a major force in the technology industry. As the company explores the limitless possibilities of artificial intelligence, it remains well-positioned for continued success.
Advertising Efforts and Monetization Strategy: A Look into Meta’s Progress
Investors eagerly await updates on Meta’s advertising endeavors, particularly the implementation of artificial intelligence (AI) and other innovative techniques to enhance ad targeting. Additionally, they are interested in the company’s progress with monetizing Reels, a TikTok-like video service available on Facebook and Instagram.
Monetizing Generative Artificial Intelligence: Meta’s Next Steps
Meta’s plans for monetizing and launching its generative artificial intelligence initiatives also generate intrigue. The introduction of Llama, the Large Language Model Meta Artificial Intelligence, has garnered attention since it was released as open-source. However, the company has yet to disclose consumer access details to this model. Investors wonder if the costs associated with investing in and maintaining AI models will impact Meta’s ongoing efforts to reduce costs and improve profit margins.
Analyst Upgrade and Growth Outlook
Dan Salmon, an analyst at NewStreet Research, recently upgraded his rating on Meta from Neutral to Buy. He also raised his target price from $285 to $350, citing the potential of Meta’s expanding AI division. As such, market participants anticipate further insights into Meta’s AI-centered plans during this earnings call.
The Metaverse and Threads: A Renewed Focus
Meta’s stance on the metaverse, a highly discussed topic of late, will likely be under scrutiny. Interestingly, the company has been less vocal about it in recent earnings calls. Moreover, investors are curious about Meta’s new offering, Threads, a Twitter competitor. They seek updates regarding monetization strategies for this platform and the anticipated timeline.