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It is Bloomberg Business Week. Shares some meta platforms bouncing around, but up about five percent in the after hours. Now, the company did report second quarter revenue that beat estimates. Revenue coming in at thirty nine point oh seven billion dollars. That's a twenty two percent year over year increase, beating estimates of thirty eight point three four billion dollars in that family of apps revenue that is the core business thirty eight point seven two billion dollars in the quarter,
up twenty two percent. Estimate was for thirty seven point seven six Carol highlighted the capex, the company seeing total capex thirty seven to forty billion where they sought where investors saw thirty five to forty billion. The estimate was for thirty seven point five to three billion dollars. So again, what we saw from Microsoft and what we saw from Alphabet.
Here's what I'm going to say. Their bread and butter is advertising. They did report better than a sales for the second quarter, So again, are right through the Wagner Carol offering evidence at the company's heavy investments in AI helping itself more targeted and personal personalized advertisements. That is still their bread and butter. So if they are saying we are spending guys, and we're going to spend even more,
but look at the results from the past quarter. And that's where I'm trying to make sense of the stock being up here in the aftermarket, up five percent. It's not like people are saying, oh my god, what are you spending?
You all thought you all thought that AI was going to make our jobs easier, when in reality it just makes Facebook better at targeting ads to you.
Yeah, yeah, well done. All right, So let's get to it. Our team coverage with Bloomberg News contributor John Earlekman joining us from Toronto, along with Bloomberg News social media reporter Asha Counts joining Usgosh, I want to start with you, how did meta do?
I mean? I think you said it earlier. They beat on everything right, The revenue beat expectations actually the top end of what analysts expected. And they also beat on the amount of users that they have. I mean, they just they beat in every dimension. Now, the one thing you did mention right with that capex, which is that spending a lot of which is going to things like a infrastructure. You're talking servers and data and hardware and
stuff like that. That increased a little bit. But because it was that bottom range, right, like, their top line level didn't increase. I don't think investors are going to be that upset about that. So, yeah, they beat on everything, changed a couple of things, but I think overall it's good for them.
Hey, John, what sticks out to you here? You've had a few minutes to go over these numbers. What sticks out to you?
Just tim that Mark Zuckerberg and Metas seem to have the script down.
Pretty cold at this point.
I mean, building on everything you've said, here's a company that over the last couple of years, has learned its lessons when it comes to what starts to make Wall Street uncomfortable on the spending front. And I think that the fact that the as you guys highlighted earlier, that they can make the case that the revenue that came in stronger than expected gets assistance from the investment that's coming from all this AI focus.
That seems to be a helping hand here.
I would add though, that if you go back to the last quarter, remember and by the way, this stock always moves a lot. Generally, it moves a lot after earnings, either up or down. But the shares got crushed because investors had to do another reassessment on this AI spending. So arguably we've had some time to fit with this and even the stock price. I know it's up a lot this year, but at last check it was coming into this earnings.
Report a little bit lower than where it.
Was heading into the last quarter. So I don't think anyone would have been surprised to see a big spending bill. But you have stronger than expect did numbers. And remember this is also the company that's starting to find shareholder friendly tricks and it's playbook. They issued their first dividend and they're buying back a lot of stocks, so they've got the levers they can pull. But we still have to see how all this AI spending nets out in
the long term. We don't quite know, but they're trying to paint a good picture so far.
Yeah, and for a stock that bopped up I think about ten percent here in the aftermarket, we're now just up about three point six percent, still higher, but it continues as I think investors and analysts continue to go through the report and we'll wait to see what comes out on the call. Having said that, John, how does Meta square with some of the other companies that we are so intently focused on their AI spending and their AI ROI return on investment?
You know, everybody is in an arms race here, and I think at the end of the day, Carol, you could make an argument that because Alphabet came first and investors got a little jittery on the roadmap for the spending on AI and the return on investment. Remember that to coming into this week, tech had been pretty roughed up, So it almost dare I say, set the bar lower for the tech giants that would be putting out numbers
this week. I think that at the end of the day, longer term, and Mark Zuckerberg said it himself in his interview with Emily Chang not that long ago, there is a possibility that all the spending they are doing today might be an overshoot, but they're right now trying to build a future where engagement can be increased through AI, that advertisers can have better, more targeted ads through AI, that they can have a much cleaner thread between software
and hardware, like the glasses you're talking about.
I think they really like where this story is going.
Over the long term, they're probably getting a boost as well, just because there's a lot of eyeballs on big events right now like the Olympics, and so they can benefit from that.
But there's the other side of that we don't know a lot about.
Mark Zuckerbergs spent a lot of time in front of lawmakers in Washington over.
The last decade.
People are still a little concerned, maybe more than a little concerned about the ramifications of all this AI technology that they're weaving into the Meta ecosystem. But you know, at the end of the day, if they can keep the bottom line in a relatively clean manner and keep growing the revenue story, you know, Meta is in a position to have a arguably a cleaner quarterly story than some of its peers.
Hey, so can you talk a little bit about the integration of LAMA and AI into meta platforms family of apps. You know, Carol and I were joking about the idea of the result of all this investment in AI is just better targeted ads.
It's funny because Metta is one of those companies where the AI is all behind the scenes, right. So obviously they've been using AI for years, per decades to recommend content on your feed, whether that's on Instagram or Facebook, whether that's posts and images or videos, and so a lot of it goes towards that. But then they've also released new products like AI chatbot that you could talk to, right, So meta AI, if you go on Instagram or Facebook, it'll pop up and you can ask it questions and
things like that, so you see some product experiences. They also had rolled out some things like celebrity chatbots, so you could chat with a chatbot that looked and sounded like, you know, Tom Brady, for example.
I knew you were gonna say Tom Brady, Yeah, I remember he showed that off.
Right, Yes, yeah, they showed that off. But then they shuddered it recently, and so it's like, how much are those products and services really moving the needle for them or is it really just again like you're saying, going back to the core advertising business, going back to the feed, and how do they recommend content that users actually want to watch the view?
Can I help me out here? Is there something in this release that sells specifically shows specifically is there a number or something that says, Yep, here's our AI investing and here's how it paid off? I mean, or John, do we just assume that if the revenue is beating that it's because of AI spending? You know what I mean?
Yeah, I absolutely know what you mean.
I mean, the first line in the press release itself was really trying to talk more about how AI is complementing the hardware that they've got.
Yeah, and that might just speak to the fact that go back a couple of years.
Ago, as we were just highlighting like AI is technically not a new thing for the company, but it is the hot thing for the world to talk about. So it is front and center right now. But a couple of years ago what was front and center was quite literally changing the name from Facebook to Meta and talking about the metaverse and talking about you know, other VR and AR opportunities. And so I think that there is
still because of the explosive spending in that area. You know, maybe this is Mark Zuckerberg just wanted to put a pin in the fact that they can actually make all of this thing together. I would imagine, Carol, you get more color on how they're connecting the advertising dots on the quarterly conference call. But the revenue growing. I think already analysts, in reaction to this as Bloomberg is reporting, are suggesting that as the case.
Listen, both of you. Thank you so much. Bloomberg News contributor John Arlokman out there in Toronto. Bloomberg News social media reporter Asha Counts in Chicago shares a mediciin right now up five point four percent,