Meta shares soar 10% on big earnings beat as Zuckerberg predicts "superintelligence"
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Meta outperformed Wall Street expectations with its Q2 earnings report, sparking an aftermarket rally of as much as 11%.
Why it matters: The company's massive continued investments in AI infrastructure and talent — including a high-profile, big-ticket hiring spree poaching some top researchers from competitors — haven't dented Meta's numbers or investors' enthusiasm.
- Superintelligence — defined as "AI that surpasses human intelligence in every way" — is coming "sooner rather than later," though it is likely still years rather than quarters off, CEO Mark Zuckerberg told investors on an earnings call.
By the numbers: Meta reported earnings per share of $7.14, versus $5.88 expected, per FactSet.
- It reported $47.52 billion total revenue, versus $44.81 billion expected.
It forecast Q3 revenue in a range of $47.5 billion to $50.5 billion, versus Wall Street estimates of $46.23 billion.
The big picture: Zuckerberg retooled Meta's AI efforts this spring with a new team and a commitment to the superintelligence push.
- The company expects its growth in capital expenditures to accelerate, led first by investment in AI data centers and infrastructure and second by new spending on employee compensation — including the astronomical packages offered to lure leading researchers.
Zuckerberg spun out a utopian vision of an AI-driven future in a video and memo Wednesday morning.
- He said "personal superintelligence" will "help you achieve your goals, create what you want to see in the world, experience any adventure, be a better friend to those you care about, and grow to become the person you aspire to be."
Yes, but: The drive to superintelligence could mean Meta downplays its previous strategy of promoting open-source AI as a tool for individual empowerment.
- "Superintelligence will raise novel safety concerns," Zuckerberg wrote. "We'll need to be rigorous about mitigating these risks and careful about what we choose to open source."
Between the lines: While the now-3.4 billion daily global users of Meta products wait for superintelligence's advent, Meta has already gotten busy applying today's AI to boosting its bottom line.
- "AI is unlocking greater efficiency and gains across our ad systems," Zuckerberg said on the earnings call.
- He attributed a 5% increase in time spent on Facebook (6% on Instagram) this quarter to better AI-driven content recommendations.
The bottom line: "We have this principle that we believe in across the company," Zuckerberg said. "We tell people: Take superintelligence seriously."
