Meta's strong Q2 results and focus on AI drive stock price gains.

From Morningstar: 2024-08-01 05:55:00

Meta delivered strong results in Q2 with a 22% revenue increase to $39.1 billion and a 10% rise in ad pricing. Daily users reached 3.27 billion, while ad impression growth slowed to 10% YOY. Capital spending rose but free cash flow increased by nearly 20%, prompting an increased fair value estimate to $450.

Meta has ambitious plans in AI, focusing on developing customer service agents for businesses and expanding Meta AI globally. CEO Mark Zuckerberg sees AI as a key growth driver, with opportunities in India and strong adoption of AI-driven Ray-Ban glasses. AI advancements are expected to enhance user experiences and improve targeted advertising.

Despite strong financial performance, Meta remains committed to investing heavily in AI-related infrastructure and technology. The company believes in the flexibility of its computing capacity and is optimistic about future growth opportunities. With a wide Morningstar Economic Moat Rating, Meta aims to maintain strong cash flow regardless of AI’s direction.



Read more at Morningstar: Meta Stock Price Gains on AI-Fuelled Earnings