Meta's shares rose 13% this month, with the company performing many times better than other tech giants such as Google, Microsoft, and Amazon. This increase was made possible, among other things, by Zuckerberg's convincing investors that artificial intelligence helps improve the results of the company's key business, digital advertising.
“It was his best earnings call as a public CEO. He explained the near-term benefits of AI, the long-term benefits and the timing of how all this is going to play out. And he did it in a compelling way,” said Gene Munster, managing partner of Deepwater Asset Management.
Meta uses artificial intelligence to improve the search for interested users for advertisers. This adds efficiency to the company's core business, which generates almost all of its revenue. AI is also used to improve content recommendations on Facebook and Instagram, which helps to better engage the audience and ultimately generate more advertising revenue.
As a result, the company' s share price and total revenue in the second quarter of 2024 exceeded analysts' expectations despite the fact that AI itself is not yet profitable. Doug Anmuth from JPMorgan, the largest bank holding company in the US by assets, said that as a result, Meta "continues to earn the right to spend big on generative AI."
While Meta is doing well, investors in other tech giants are not so happy with the results. Google shares underperformed despite the fact that its earnings report was higher than expected. However, capital expenditures also exceeded expectations.
A similar situation is happening at Microsoft, which emphasized during its latest financial statement announcement that revenue from Auzre is slowing down.