Facebook-owner Meta shares rise on forecast strong growth will continue

Chief executive Zuckerberg talks up AI products 'in the pipeline'

The revenue bump comes despite the company also forecasting that expenses would rise in both 2023 and 2024, citing costs including legal fees and increased spending on infrastructure considered key to the tech sector's feverish artificial intelligence race. Picture: Yui Mok/PA

Meta Platforms, which owns Facebook and Threads, forecast third-quarter revenue above market expectations, sending shares up on the suggestion it anticipated higher ad spending as a result of an improving macroeconomic environment.

The company expects July-September revenue in the range of $32bn (€28.8bn) to $34.5bn, compared with analysts' average estimate of $31.3bn. 

"We continue to see strong engagement across our apps and we have the most exciting roadmap I've seen in a while with Llama 2, Threads, Reels, new AI products in the pipeline, and the launch of Quest 3 this fall," said chief executive Mark Zuckerberg.

The revenue bump comes despite the company also forecasting that expenses would rise in both 2023 and 2024, citing costs including legal fees and increased spending on infrastructure considered key to the tech sector's feverish artificial intelligence race.

Shares initially surged 7% in after-hours trading before dropping back to around a gain of 5% above the closing price.

Meta also beat second-quarter revenue estimates. Revenue grew 11% to $32bn in the quarter ended June, compared to analysts' average estimate of $31.1bn. 

Tech shares, including Meta, Google, and Microsoft, have been driven in recent weeks by frenzy over the potential for AI products. 

Amazon has said its cloud division has drawn thousands of customers to try out its service vying with Microsoft and Google in a key area of artificial intelligence. 

The company also announced new AI tools, including a facility to build more conversational customer-service agents, technology access from the startup Cohere and a healthcare system for generating clinical notes after a patient visit.

Organisations including Sony, Ryanair, and Sun Life have tried out Amazon Bedrock, a service the company announced in April that lets businesses create applications with a range of AI models, Amazon vice president Swami Sivasubramanian said.

• Reuters