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Meta Platforms (META) posted better-than-expected second quarter results. The social media giant reported earnings of $5.16 per share versus an estimate of $4.72. Revenue of $39.07 billion topped the $38.43 billion estimate, with ad revenue also exceeding analyst expectations.
For Q3, Meta forecasts revenue of $38.5 billion to $41 billion. The Street had been looking for $39.16 billion.
The operating loss for Reality Labs was $4.49 billion compared to the expected $4.53 billion. The company warned, however, that it expects "significant capital expenditures growth" in 2025.
Market Domination Overtime anchors Julie Hyman and Jared Blikre break down Meta's latest quarterly report.
For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.
This post was written by Stephanie Mikulich.
Meta earnings are out right now and that company second quarter revenue coming in at $39.07 billion dollars. $38.34 is what analysts have been predicting. Earnings per share beating estimates by a pretty wide margin here. $5.16, $4.72 is what analysts had been anticipating. And the company for the third quarter says revenue will be $38 and a half billion dollars to $41 billion dollars. Analysts have been looking for $39.2 billion give or take. Here's an important part of what I'm seeing here. The company says it expects significant capital expenditures growth in 2025. Uh, so that's something that the street had been waiting for. Were they going to keep spending on AI, spending on reality labs, that unit? And it looks like the answer is yes.
And it looks like investors have taken that in stride, not uh, not weighing this at the, on the stock price at all. Uh, here's another one. Here's a quote: absent any changes to our tax landscape, we expect full year 2024 tax rate to be in the mid-teens. Uh, we anticipate our full year 2024 capital expenditures in the range of $37 to $40 billion and that is up from their prior range and that's what you were just talking about, basically. The money they're going to shell out for the next year, those spends on AI. You know, I've seen estimates for Nvidia, I'm going to switch gears just a little bit, it is related. I've seen estimates for Nvidia sales next year topping $200 billion dollars and that's just mind blowing to think that they'd come from barely low double digits only a year or two ago.
Well, and to your point, Meta says that infrastructure costs will be the driver of expense growth in 2025. In other words, building out data center capabilities to handle the AI training and then inference. And that means something like Nvidia is a direct beneficiary of that. Um, but it's interesting to see them talk about that. So seeing the shares go higher here, although giving up some of the, the height of the early gains that we were seeing and certainly we'll see them move on the call as well, as analysts press Mark Zuckerberg on you know, what's going on with the spend, where is the spend going here. Um, also looking at, um, ads, you know, ads revenue for the company that that has been beneficial to it. So that's something to keep an eye on as well because that's a big part of the business.