Meta shares rise after earnings top expectations

SAN FRANCISCO, United States — Meta on Wednesday reported profit of $13.5 billion in the recently ended quarter, beating market expectations and causing its share price to jump.

Meta, the parent company of Facebook and Instagram, said revenue in the quarter was $39 billion, about 22 percent higher than the same period a year earlier.

"We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year," said Meta founder and chief Mark Zuckerberg.

Meta shares rose more than six percent to $506.91 in after-market trade that followed the release of the earnings figures.

The impressive profit came even though Meta's Reality Labs unit, devoted to virtual and augmented reality products, lost $4.5 billion, which was more than analysts expected.

"We are in the fortunate position where the strong results that we're seeing in our core products and business give us the opportunity to make deep investments for the future," Zuckerberg said on an earnings call.

"I plan to fully seize that opportunity."

Meta's overall costs rose seven percent to $24.22 billion when compared to the same period a year earlier, with the company racing against Microsoft, Google and other tech firms to be a leader in artificial intelligence.

Microsoft saw its shares slip this week on earnings figures showing its crucial cloud computing unit did not grow as strongly as expected.

Shares of Google-parent Alphabet dropped on concerns that ad revenue was slowing while costs were on the rise after its earnings release.

"Meta stands out from other tech firms that have AI ambitions because it already brings in a massive amount of revenue from digital advertising," said Sonata Insights founder and chief analyst Debra Aho Williamson.

"Unlike Google, which is grappling with making changes that will impact its core ad business, most of Meta's AI investments are either aimed at making advertising on its properties work better, or at building new features that could eventually become revenue drivers."

Zuckerberg has become an unexpected evangelist for open-source technology when it comes to developing artificial intelligence, pitting him against OpenAI and