Meta's stock slid in after-hours trading on Wednesday after the tech giant posted strong third-quarter results but warned that its expenses will be significantly higher in 2026 than this year. Like its rivals, Meta Platforms Inc. has been on an artificial intelligence spending spree and said its costs will grow much faster next year, driven by infrastructure costs and employee compensation as it has hired AI experts at eye-popping compensation levels. “Employee compensation costs will be the second large ...

Core Insights - The Silicon Valley company is planning to increase its spending this year and anticipates continued investment in 2026 as it hires A.I. researchers and develops data centers to support its technology [1] Group 1 - The company is focused on hiring A.I. researchers to enhance its capabilities [1] - There is a significant investment in building data centers, which indicates a commitment to scaling its technological infrastructure [1] - The projected increase in spending reflects the company's strategic direction towards A.I. and data management [1]

About this content About Angela Harmantas Angela Harmantas is an Editor at Proactive. She has over 15 years of experience covering the equity markets in North America, with a particular focus on junior resource stocks. Angela has reported from numerous countries around the world, including Canada, the US, Australia, Brazil, Ghana, and South Africa for leading trade publications. Previously, she worked in investor relations and led the foreign direct investment program in Canada for the Swedish government ...

Markets are in the midst of the busiest week for third quarter earnings, with results from several Big Tech companies highlighting the calendar. So far, the earnings season is off to a positive start. As of Oct. 24, 29% of S&P 500 companies have reported results, according to FactSet data, and analysts are expecting a 9.2% jump in earnings per share during the third quarter. If that figure holds, it would mark the ninth straight quarter of positive earnings growth but a deceleration from the 12% earnings ...

Meta's AI Strategy & Challenges - Meta's advertising results are impressive, but the focus is on Mark Zuckerberg's AI vision, given billions of dollars invested in talent and multiple reorganizations of the AI division [1] - Meta faces an existential threat if users prefer chatbots over human interaction on social media platforms, requiring a clear direction from Zuckerberg [2] - Continued ad engagement is crucial, measured by increasing price per ad, increased impressions, and increased time spent, indicating AI investments are yielding results [3] User Engagement & Market Reach - Expectations are for daily active users to increase by 6% [3] - Meta has access to 75% of the world's internet users outside of China, with 35 亿 (3.5 billion) active users out of 45 亿 (4.5 billion) people with internet access [4] Google's Performance & Competition - Google is quieting the narrative around search disruption and proving Google Cloud is gaining market share [5] - Search revenues are expected to rise 11% year-on-year, up 9% from Q1, matching the prior quarter, illustrating resilience against AI competition like ChatGPT [6] - Cloud expectations are for 30% revenue growth year-on-year, an 8% sequential increase, suggesting Google is gaining momentum in AI compute and model access [6] Market Dynamics & Growth - Results from these large tech companies are imperative for new market highs, given their size in the indices [8] - A bull market in the MAG 7 is a prerequisite for an overall bull market, but the question is whether supernormal growth can continue amid stiffer competition [9]

Group 1: Meta's Performance and Challenges - Meta is expected to show impressive advertising results, but there is a strong need for clarity on its AI strategy from Mark Zuckerberg [1][2] - The company is facing long-term challenges as users may prefer interacting with chatbots over human connections on social media, posing an existential threat [2] - Daily active users are projected to increase by 6%, which is significant given Meta's 3.5 billion active users, indicating a large market penetration [3][4] Group 2: Google’s Growth and Market Position - Google is expected to see search revenues rise by 11% year-on-year, indicating resilience against competition from AI models like ChatGPT [6] - Cloud revenue is anticipated to grow by 30% year-on-year, suggesting that Google is gaining momentum in the cloud market [6][7] - The performance of major tech companies, including Google, is crucial for overall market trends, as their growth is essential for a bull market [8][9]

Financial Performance - Total revenue for Q3 2025 reached $51242 million, compared to $40589 million in Q3 2024[11] - Advertising revenue in Q3 2025 was $50082 million, up from $39885 million in Q3 2024[11] - Family of Apps (FoA) revenue increased to $50772 million in Q3 2025 from $40319 million in Q3 2024[11] - Reality Labs (RL) revenue increased to $470 million in Q3 2025 from $270 million in Q3 2024[11] - Income from operations reached $20535 million in Q3 2025, compared to $17350 million in Q3 2024[11] - Net income for Q3 2025 was $2709 million, which includes a one-time, non-cash income tax charge of $15930 million[21, 22] - Excluding the one-time tax charge, Q3 2025 net income would have been $18640 million[22] User Metrics - Family Daily Active People (DAP) reached 343 billion in Q3 2025, compared to 329 billion in Q1 2025[35] - Family Average Revenue per Person (ARPP) was $1425 in Q3 2025[40] Advertising Metrics - Ad impressions delivered worldwide increased by 11% year-over-year in Q3 2025[46] - The average price per ad worldwide increased by 10% year-over-year in Q3 2025[50]

Core Insights - The company reported a significant net income drop of 83% to $2.7 billion due to a one-time tax charge of $15.9 billion, despite a 26% revenue increase to $51.4 billion, surpassing Wall Street expectations [1][3] - The company anticipates a full-year spending of $70-$72 billion, higher than previous estimates, with expectations for even larger growth in 2026 [5] - The company is heavily investing in AI infrastructure, forming a joint venture worth $27 billion to build a data center in Louisiana to support its AI initiatives [6] Financial Performance - The net income fell to $2.7 billion, down 83% from previous periods, but would have increased to $18.6 billion without the one-time charge [3] - Revenue rose by 26% to $51.4 billion, with an average ad price increase of 10% year-over-year [3] User Engagement - The company reported 3.54 billion daily active users across its platforms, an 8% year-over-year increase, with Instagram reaching 3 billion monthly active users [4] - The new short-form AI video feed, Vibes, is showing promising retention and growth in usage [7] Strategic Initiatives - The company is engaged in an AI arms race, with concerns about potential market bubbles and the sustainability of revenue growth [5] - The CEO emphasized the importance of building AI capacity in anticipation of "superintelligence," which could lead to significant opportunities [7] Workforce Adjustments - The company is letting go of approximately 600 workers in its Superintelligence Labs AI unit while retaining top-tier teams [8]

Meta said it expects total expenses to significantly increase in 2026, and will continue to invest at historic levels in artificial intelligence https://t.co/4e45ME6lwI ...

Core Insights - Meta Platforms Inc. continues to invest heavily in the metaverse, focusing on virtual reality (VR) and augmented reality (AR) technologies [1] Financial Performance - In the third quarter, the Reality Labs division reported an operating loss of $4.4 billion, with sales of $470 million, outperforming Wall Street's expectations of a $5.1 billion loss and $316 million in revenue [2] - Since late 2020, Reality Labs has accumulated over $70 billion in cumulative losses, highlighting the significant costs associated with developing VR, AR, and consumer hardware [3] Product Development - The Reality Labs unit is responsible for the Quest-branded VR headsets and AI smart glasses developed in partnership with EssilorLuxottica [3] - The recently launched $799 Meta Ray-Ban Display glasses are the first consumer-ready AI glasses from Meta, featuring a built-in display and a wristband with neural technology [4] Market Response - EssilorLuxottica reported that the AI glasses contributed positively to its sales in the third quarter, indicating a successful product launch [4] - The CFO of EssilorLuxottica noted a significant lift in sales attributed to the Ray-Ban Meta wearables, suggesting a potential shift in Meta's metaverse strategy [5] Leadership Changes - Vishal Shah, previously leading Meta's metaverse initiatives, has transitioned to a vice president role in AI products within the Superintelligence Labs division [5]