From Morningstar: 2024-10-31 10:28:56

Meta posted strong Q3 results, with revenue up 19% to $41 billion and operating margins at 43%. Ad impressions and prices rose, with over 500 million users using Meta’s chat assistant. The company’s GenAI investments are driving user engagement and monetization, with AI tools expected to enhance ad targeting.

Meta’s AI investments are showing promise in improving ad targeting and creative processes for advertisers and creators. GenAI features are being used by over 1 million advertisers to create more effective ads, resulting in a 7% increase in conversions. AI-led content curation on Facebook and Instagram also led to increased user engagement.

Threads and Reality Labs are growth areas for Meta, with Threads expected to increase ad inventory and Reality Labs seeing sales growth of 29% to $270 million. While Reality Labs remains unprofitable, Meta is confident in its ability to reduce operating losses as the segment scales. FoA operating margins are up to 54%, but expected to decline due to increased capital expenditures.

Looking ahead, Meta anticipates a material increase in capital expenditures for fiscal 2025. Q4 sales are projected to be between $45 billion-$48 billion, with operating expenses in the range of $96 billion-$98 billion. Management is confident in meeting these targets, despite ongoing investments in AI and capital expenditures. 1. The stock market hit record highs today, with the S&P 500 closing at 4,200 and the Dow Jones reaching 34,000. Analysts attribute the surge to strong corporate earnings and optimism about economic recovery.

2. In international news, tensions are rising between Russia and Ukraine as Russia amasses troops near the border. The U.S. has expressed concern and is monitoring the situation closely.

3. A new study shows that the COVID-19 vaccine is highly effective in preventing transmission of the virus. The study found that vaccinated individuals have a significantly lower risk of spreading the virus to others.

4. In entertainment news, the highly anticipated film “Black Widow” has been delayed once again due to the ongoing pandemic. The film, starring Scarlett Johansson, was originally scheduled for release last year.

5. Climate activists are calling for urgent action after a new report revealed that global temperatures are on track to exceed the 1.5°C threshold set by the Paris Agreement. The report warns of catastrophic consequences if immediate steps are not taken to reduce emissions.



Read more at Morningstar: Meta Earnings: Strong Q3 and Promising AI Developments