Meta Platforms Inc. Reports Strong Quarter and Positive Outlook

Meta Platforms Inc., the parent company of Facebook, has seen a significant increase in digital ad revenue, leading to a boost in its stock price. After the release of its fiscal second-quarter earnings, Meta's stock initially surged by 7% in after-hours trading on Wednesday.

For the second quarter, Meta reported a net income of $7.79 billion, or $2.98 per share, compared to $6.7 billion, or $2.46 per share, in the same period last year. The company's revenue also showed growth, rising by 11% to $32 billion from $28.8 billion year-over-year.

Analysts had expected Meta to achieve a net income of $2.91 per share on revenue of $31.1 billion, according to FactSet.

Several factors contributed to Meta's strong performance during the quarter, including an uptick in advertising, the successful monetization of Reels, and improved ad targeting and measurement through artificial intelligence technology.

In a statement announcing the results, Meta CEO Mark Zuckerberg expressed satisfaction with the company's performance, highlighting the strong engagement across their apps and the exciting future plans, such as Llama 2, Threads, Reels, and various upcoming AI products. He also mentioned the highly-anticipated launch of Quest 3 this fall. Meta's strategic focus has shifted from the metaverse to AI as it strives to remain at the forefront of technological advancements.

Looking ahead, Meta executives have predicted that third-quarter revenue will range between $32 billion and $34.5 billion. This outlook surpasses analysts' average estimate of $31.2 billion, also according to FactSet.

In terms of its user base, Facebook reported 2.06 billion daily active users, showing a 5% increase compared to the previous year. Additionally, the "family" of Meta apps, which includes Instagram, recorded a daily active user count of 3.07 billion, representing a 7% growth.

In regular trading, Meta's stock edged up by 1.4% to reach $298.57. Its stock has seen an impressive surge of 148% so far this year, while the broader S&P 500 index has increased by 19%.