Meta’s advertising business keeps rolling as AI aspirations rise

Meta’s performance has been fueled by breakthroughs in artificial-intelligence technology that boosted its ad-targeting capabilities. (Photo by SEBASTIEN BOZON / AFP) (AFP)
Meta’s performance has been fueled by breakthroughs in artificial-intelligence technology that boosted its ad-targeting capabilities. (Photo by SEBASTIEN BOZON / AFP) (AFP)

Summary

Meta Platforms on Wednesday reported record first-quarter sales, with a 27% increase versus the year prior.

Meta Platforms on Wednesday reported record first-quarter sales as the company continued to build on AI-powered momentum in its advertising business.

Sales increased to $36.5 billion, up more than 27% compared to a year prior and a record for the January-to-March period, exceeding analyst expectations. The revenue growth was up slightly compared to a quarter prior, when Meta reported annual revenue growth of 25%.

Meta’s performance has been fueled by breakthroughs in artificial-intelligence technology that boosted its ad-targeting capabilities. Those advancements in AI have helped Meta overcome challenges posed by privacy changes implemented by Apple that erased $10 billion of revenue for the social media company in 2022.

In April, Meta released its latest large language model, Llama 3, and announced that it would begin featuring the technology more prominently in apps including Instagram and WhatsApp. Llama 3 is capable of instantly generating images and providing users with article summaries.

After the company moved to reduce costs significantly in what Chief Executive Mark Zuckerberg called a “year of efficiency" in 2023, investors grew concerned about the risks of Meta’s heavy investments in AI, said Paul Marino, chief revenue officer of GraniteShares, an issuer of exchange-traded funds focused on Meta and other widely-traded tech stocks.

The recent release of Llama 3, which is “open sourced" and thus free for individual and business users, has put the company in “pole position," he said. “Public trust in the platform will be higher."

Write to Salvador Rodriguez at salvador.rodriguez@wsj.com

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