Meta (Facebook, Instagram, WhatsApp) doubled its net profit over one year in the first quarter, raking in $12.4 billion, a result even better than that expected by the market, enthusiastic about the prospects of the American group in intelligence artificial (AI).
The social media giant saw its quarterly revenue climb 27%, reaching $36.5 billion, according to its earnings release released Wednesday.
“Meta’s advertising business is booming,” responded Max Willens of Emarketer.
The analyst stressed that the company has more advertising space available for sale, and an increasing average price, enough to “generate enviable margins, even if it continues to invest in sectors which will perhaps not contribute not be profitable for several years.
Meta has indeed clarified that it anticipates higher spending than expected for this year on infrastructure and research and development for AI.
Information which stunned the market: its title lost more than 12% during electronic trading after the close of the New York Stock Exchange.
On the user side, Meta lists 3.24 billion people who use at least one of its services on a daily basis, or 50 million more than at the end of 2023.
Meta AI
Meta’s growth is based in particular on its ultra-sophisticated advertising tools and on the appetite of consumers and advertisers for “Reels”, these short entertaining videos to scroll in succession, copied from TikTok.
By the end of the year, Meta could also start selling advertising on Threads, its written message platform similar to X (formerly Twitter).
This would please “advertisers who want to communicate in real time with their audience and who will finally have a viable alternative to X,” noted Mike Proulx, vice-president of Forrester.
But the subject that interests the market is above all Meta’s progress in generative AI (production of texts, images and other content, upon simple query in everyday language).
Mark Zuckerberg unveiled the new version of Meta AI last week: remaining very discreet until now, this AI assistant will gain skills and visibility on Facebook, Instagram, Messenger and WhatsApp.
In this way, “Meta puts its AI capabilities at the forefront for its users, who will no longer depend on Google or Bing for online search,” reacted Mike Proulx.
And “Meta is even tackling ChatGPT,” the OpenAI interface that popularized generative AI, he added.
Large technology companies, led by Google and Microsoft, are engaged in a frantic race to deploy this technology.
Meta has fallen behind, but “thanks to its platforms it has a massive user base to test AI experiments (…) and quickly evaluate those towards which its users gravitate”, commented Debra Williamson of Sonata Insights.
“Open model”
After a very difficult 2022, Meta bounced back in 2023 despite inflation, thanks in particular to measures taken to reduce costs, including a social plan.
As for the metaverse (mixing of real and virtual universes via high-tech glasses and headsets), described by Mark Zuckerberg as the future of the internet, the Reality Labs branch once again recorded significant losses, of more than 3.8 billions of dollars.
But Meta continues to move forward in this area, with this week’s launch of “Meta Horizon OS,” its operating system for mixed reality devices, now open to other manufacturers.
The billionaire took the opportunity to highlight his company’s “open source” approach (free access to programming code) in AI and the metaverse, as opposed to its rival Apple, which has recently marketed its own headset. mixed reality (combining virtual and augmented realities).
“On smartphones, Apple’s closed model has won. Phones are very controlled, you are limited in what you can do,” Mark Zuckerberg said in a filmed message. “Our goal is for the open model to be the norm in metaverse devices.”
Like Apple and other tech giants, Meta is facing lawsuits from the American antitrust authority.
