Meta Blasts Up 11% on Q2 Results—The AI Train Keeps Chugging

Core Insights - Meta Platforms reported Q2 financial results that significantly exceeded expectations, with shares rising over 11% in after-hours trading [1][3] Financial Performance - Meta's Q2 sales reached approximately $47.5 billion, reflecting a growth rate of 22%, surpassing Wall Street's expectation of just under 15% [3] - Adjusted earnings per share were reported at $7.14, a 38% increase from the previous year, exceeding analyst forecasts of 11% growth [3] - The company projected midpoint revenues of $49 billion for the upcoming period, indicating strong future performance [3][4] Capital Expenditure and AI Strategy - Meta increased its 2025 capital expenditure guidance by $1 billion to $69 billion, signaling effective management of AI investments without needing to significantly ramp up spending [4] - The company's AI strategy has been yielding strong returns, contributing to improvements in advertising performance [7][11] Key Performance Indicators - Daily active users (DAP) grew by 6.4%, marking the fastest growth rate since Q2 2024 [5] - Average price per ad grew by 9%, with ad conversions increasing by 5% on Instagram and 3% on Facebook [6] - Ad impressions delivered rose by 11%, the highest growth rate in at least five quarters, driven by increased user engagement [7] Reality Labs and Product Demand - Reality Labs revenue saw a 5% year-over-year growth, although it declined 10% sequentially [8] - Demand for Meta's Ray-Ban AI glasses exceeded supply, indicating strong performance in this product category [9] Management Commentary and Future Outlook - CEO Mark Zuckerberg outlined a vision for "personal superintelligence," aiming to enhance user experience through advanced AI [10][11] - Core AI investments are expected to continue generating strong returns, while GenAI is not anticipated to drive significant revenue in the near term [12]