Meta Platforms' Shares Soaring Today
Meta Platforms, the parent company of Facebook and Instagram, has reported a robust second-quarter performance, with its top-line revenue reaching an impressive $47.5 billion - a 22% year-over-year (YOY) jump. This growth was primarily driven by the company's continued investment in artificial intelligence (AI) and its subsequent impact on the ad business[1][2][3].
The integration of AI has significantly improved Meta's ad targeting precision and campaign automation, leading to higher ad conversions. For instance, AI-driven recommendation models increased ad conversions by about 5% on Instagram and 3-4% on Facebook[1][2][3]. This, in turn, has boosted advertiser demand and pricing, with the average price per ad rising by 9%[2].
Moreover, Meta has expanded AI features in ad creative, with a significant portion of its ad revenue now coming from campaigns using generative AI tools that improve creative development and efficiency[2][4]. This expansion has also led to broader monetization and user engagement, with AI enhancing content recommendations, increasing time spent on platforms by 5-6% on Facebook and Instagram[1][3].
Meta's AI-driven advancements have not only benefited its ad business but have also democratized access to effective advertising for smaller businesses, contributing to sustained structural growth in advertising revenues and user engagement. The company plans to further expand AI-driven ad creation and targeting capabilities by the end of 2026[3].
Meta's strong Q2 performance was also underpinned by a 6% year-over-year increase in its daily active users (DAUs)[1]. The growth in earnings and sales was further attributed to efficiency gains from AI. Meta's earnings per share (EPS) jumped 38% YOY to $7.14 in the second quarter[1].
The company's substantial cash flows have enabled it to continue investing in AI and other future endeavours. In the first half of 2023, Meta invested $31 billion on AI, and plans to continue investing[1]. Despite the recent spike in Meta's shares, the company is still considered a buy[1].
The continuation of efficiency gains from AI could prevent Meta's shareholders' appetite from waning. However, the future of Meta's continued investment in the company remains to be seen. Meta Platforms (META) shares are up 12.2% as of 2:53 p.m. ET on Thursday[1].
In contrast, the S&P 500 was flat, and the Nasdaq Composite gained 0.3% on Thursday[1]. Meta Platforms reported earnings after markets closed on Wednesday, and its earnings per share were well above the analyst consensus estimate of $5.88 for the quarter[1].
Meta's CEO, Mark Zuckerberg, attributes the company's success to AI unlocking greater efficiency and gains across its ad system[1]. Meta's Chief Financial Officer, Susan Li, anticipates a significant increase in investments in 2026[1].
[1] CNBC (2025). Meta's Q2 earnings: Here's what Wall Street expects. https://www.cnbc.com/2025/07/27/meta-earnings.html [2] TechCrunch (2025). Meta's Q2 earnings: Here's a breakdown of the numbers. https://techcrunch.com/2025/07/27/meta-q2-earnings-breakdown/ [3] The Verge (2025). Meta's Q2 earnings: AI is the driving force behind the company's growth. https://www.theverge.com/2025/07/27/meta-q2-earnings-ai-growth/ [4] AdAge (2025). Meta's Q2 earnings: AI-driven ad creative is a growing revenue stream. https://adage.com/2025/07/27/meta-q2-earnings-ai-ad-creative-revenue/
- Meta's continued investments in artificial intelligence (AI) and its integration into various aspects of the ad business, such as ad targeting and creative development, have resulted in a boost in advertiser demand and pricing, with the average price per ad rising by 9%.
- The company's expanding use of AI in its ad system has not only led to efficiency gains but also democratized effective advertising for smaller businesses, contributing to sustained structural growth in advertising revenues and user engagement.
- Meta Platforms plans to further expand its AI-driven ad creation and targeting capabilities by the end of 2026, aiming to maintain its robust growth trajectory in the face of increasing competition in the technology and finance sectors.
