Meta Shares Surge After Reporting $13.5 Billion Profit

Meta, the parent company of Facebook and Instagram, has announced a higher-than-expected profit of $13.5 billion for the most recent quarter, leading to a nearly 7% surge in its share price. Revenue for the April-June period reached $39 billion, surpassing market expectations and marking a 22% increase from the previous year.

In its earnings report released on Wednesday, Meta projected third-quarter revenue between $38.5 billion and $41 billion. CEO Mark Zuckerberg highlighted the company’s achievements, including advancements in Meta AI, which is on track to become the world’s most widely used AI assistant by year-end. He also noted the successful launch of the first frontier-level open-source AI model and positive traction with Ray-Ban Meta AI glasses.

Meta’s strong performance contrasts with mixed results from other tech giants in the “magnificent seven” group. Microsoft saw its stock fall by 8% following disappointing growth in its Azure cloud services despite a 15% revenue increase. Alphabet and Tesla also failed to meet investor expectations, with YouTube advertising revenues and car sales respectively falling short.

The broader market has been volatile, with the S&P 500 experiencing its largest daily decline since December 2022, dropping 2.3%, and the Nasdaq falling 3.6%, its steepest single-day drop since October 2022. This turbulence has led some analysts to question the sustainability of the current AI hype.

Zuckerberg, in a recent open letter, emphasized Meta’s commitment to AI through open-source technology. He argued that open source is crucial for ensuring AI benefits are widely accessible and not concentrated in a few hands. He believes that open-source AI will enhance human productivity, creativity, and quality of life, and accelerate progress in various fields, including medicine and scientific research.

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