Meta's shares experienced a rise following its report of double-digit revenue growth, the first since 2021. CEO Mark Zuckerberg credited the company's costly investment in artificial intelligence for the positive results. This rebound comes as Zuckerberg aims to revive Meta from a period of slow growth, macroeconomic challenges, and investor apprehension regarding the metaverse. Similar to other Big Tech companies, Meta has capitalized on the growing excitement surrounding emerging AI technology by investing in the field. Zuckerberg has also undertaken a significant restructuring effort, including streamlining the management structure and downsizing the workforce by around 20, 000 employees, which he has referred to as the "year of efficiency. " During an upbeat call with investors and analysts, he expressed satisfaction with the outcomes of their decisions and investments. During the earnings call, analysts focused on Meta's AI-related investments, particularly generative AI, a technology capable of creating text, images, and code. Zuckerberg stated that their investments in utilizing AI to enhance personalization in user feeds and recommendation systems were yielding positive results. He emphasized Meta's current focus on building AI agents, or chatbots, to assist businesses and creators in engaging with users. Additionally, Meta plans to leverage generative AI to improve advertising effectiveness and internal productivity. In their bid to compete with rivals OpenAI, Google, and Microsoft, Meta recently released a commercial version of Llama 2, a large language model on which their chatbots will be built. However, Zuckerberg acknowledged that the speed at which potential AI products could scale was one of the uncertainties they were closely considering when determining the amount of AI capital expenditure to allocate. The revenue potential of AI for the company also remains unclear, as Meta has released certain technologies, like Llama 2, as open source, allowing developers to access the source code and build upon it. Zuckerberg expressed intentions to make deals with major companies offering public cloud services, such as Microsoft, Amazon, or Google, that could implement Meta's technology on a larger scale. Meta anticipated revenue for the current quarter to range between $32 billion and $34. 5 billion, surpassing analysts' expectations of a rise to $31. 1 billion. This indicates a potential easing of the digital advertising slump that has hindered their growth over the past 18 months.

Revenues for the second quarter increased by 11 percent to $32 billion, surpassing analysts' forecast of $31. 03 billion. Following these positive results, Meta's shares rose by 6. 8 percent during after-hours trading. Net income for the second quarter saw a 16 percent increase to $7. 8 billion, compared to the consensus estimate of $7. 4 billion. However, costs rose by 10 percent to $22. 6 billion, partially due to legal expenses of $1. 9 billion and restructuring charges of $780 million. In May, Meta received a €1. 2 billion fine from the EU for privacy violations. Meta anticipates higher infrastructure-related and operating costs in 2024 as they continue to invest in data centers and servers to support both AI and the metaverse. Zuckerberg emphasized that the metaverse remained a priority as he believes it represents the next computing platform, filled with avatars. Operating losses for Reality Labs, Meta's division responsible for the metaverse, virtual reality, and augmented reality, are expected to significantly increase next year. Zuckerberg also praised the progress of Meta's Reels, a short video feed similar to TikTok, and Threads, a text-based conversation app aimed at competing with Twitter. Zuckerberg positioned Threads as a "friendly" alternative to Elon Musk's struggling social media platform. Since its launch earlier this month, Threads gained immense popularity, reaching 100 million users within a record-breaking five days. However, usage has since slowed. Zuckerberg acknowledged that the product was developed by a relatively small team on a tight timeline and they are now focused on improving retention and the core functions. As of the end of June, Meta's monthly active users across all apps, including Instagram, WhatsApp, and Quest, increased by 6 percent to 3. 88 billion.