Meta Platforms’ earnings report for the second quarter has sent its stock soaring, with revenue jumping 22% to $47.5 billion and ad impressions rising 11%. The company’s AI investments are credited with driving improvements in its ad business, particularly on Instagram and Facebook.
CEO Mark Zuckerberg attributed the growth to artificial intelligence (AI) advancements, which have increased ad conversions by 5% on Instagram and 3% on Facebook. This has led to a rise in price per ad, showing that Meta’s AI investments are paying off.
Meta’s margins expanded to 43%, with earnings per share rising from $5.16 to $7.14. The company expects strong growth in the third quarter, forecasting revenue of $47.5 billion to $50.5 billion.
Meta has outperformed peers such as Alphabet and Microsoft by a wide margin over the past few years, driven by its focus on growing its core advertising business while investing in AI for emerging businesses like smart glasses and data-labeling startups.
The company’s acquisition of Scale AI has brought key talent to Meta, including founder Alexandr Wang, who leads the new Superintelligence Labs. Meta sees superintelligence improving multiple aspects of its business, including advertising, experiences, and AI devices.
Despite Reality Labs’ losses, which total upwards of $15 billion a year, they appear to be stabilizing. Meta’s growth has allowed it to outshine its competitor Alphabet in the digital advertising space, driven by its more aggressive approach to AI adoption.
Meta’s stock is seen as a better buy compared to Alphabet, due to its focus on core advertising and AI strategy. The company’s competitive advantages are likely to drive strong growth and returns for investors.
Source: https://www.fool.com/investing/2025/08/03/meta-just-crushed-earnings-is-it-a-better-buy-than