Meta crushed earnings

Meta was up more than 9% after-hours yesterday after the social media and AI behemoth beat second-quarter analyst expectations by a long shot:

After market close Wednesday, it posted earnings per share of $7.14, versus the FactSet analyst consensus estimate of $5.88, and revenue of $47.516 billion, compared to Wall Street’s $44.806 billion forecast.

Meta has been on a spending spree as it tries to make itself an AI leader and achieve artificial general intelligence, partly through establishing a “superintelligence team” of AI experts poached from competitors.

Meta now expects capital expenditures this year to reach between $66 billion and $72 billion, narrowed and slightly higher than its prior outlook of $64 billion to $72 billion, and up approximately $30 billion year over year at the midpoint.

Next year will be a big one for spending, too.

“While the infrastructure planning process remains highly dynamic, we currently expect another year of similarly significant capital expenditures dollar growth in 2026 as we continue aggressively pursuing opportunities to bring additional capacity online to meet the needs of our artificial intelligence efforts and business operations,” Meta said in its earnings release.

The Takeaway

Investors have been hoping that AI will bolster the company’s already huge advertising business and help mitigate the spending. That looks to be the case, as ad revenue grew 21% year on year. Meanwhile, Meta’s net income grew 36% to $18.337 billion.