Meta shares drop despite revenue beat

Core Insights - Meta is expected to report third-quarter earnings with a focus on its increased spending in artificial intelligence, following a significant organizational overhaul after the launch of its Llama 4 software [1][3] Financial Performance - Analysts predict Meta's third-quarter sales to reach $49.4 billion, marking a 22% year-over-year increase, with full-year sales projected to rise 19% to $196.2 billion [4] - The company anticipates advertising sales of $48.5 billion for the third quarter [4] - Earnings per share are expected to be $6.68 [8] AI Investments and Developments - Meta has invested heavily in AI, recently laying off about 600 workers in its Superintelligence Labs AI unit while maintaining its top-tier TBD Labs [2] - The Meta AI app has seen a 56% month-over-month increase in downloads, reaching 3.9 million as of mid-October [5] - Despite this growth, OpenAI's Sora app has outperformed Meta AI in downloads on iOS during the same period [6] Strategic Shifts - Vishal Shah, previously leading Meta's metaverse initiatives, has been appointed as a product leader for the AI unit, indicating a potential shift in focus [7] - The Reality Labs unit is projected to incur an operating loss of $5.1 billion while generating $316 million in sales for the third quarter [7]