Investing.com — Meta Platforms issued better-than-expected guidance for the current quarter on Wednesday, following the release of second-quarter results that beat analyst expectations on the top and bottom lines.
Meta Platforms Inc (NASDAQ:) rose about 7% at the New York Open.
For the three months ended June 30, the company’s earnings were $5.16 on a share and revenue of $39.07 billion, beating estimates of $4.7 and $38.26 billion, respectively.
Daily active people, or DAP, stood at 3.27 billion, up 7% in the second quarter from the same period a year earlier.
Capital expenditures (capex) were $8.47 billion in the second quarter, compared to $6.72 billion in the first quarter.
Looking ahead to the third quarter, the company expected total revenue to come in between $38.5 billion and $41 billion, or $39.75 billion at the midpoint, surpassing Wall Street estimates of $39.09 billion.
The upbeat revenue outlook comes as the company raised the lower margin of its annual capital expenditure outlook to a range of $37 billion to $40 billion, from $35 billion to $40 billion previously, but full-year total cost guidance remained unchanged over a period from range of $96 billion to $99 billion.
However, the company said it “expects infrastructure costs to be a key driver of cost growth next year as we recognize depreciation and operating expenses associated with our extensive infrastructure footprint.”
Analysts at KeyBanc Capital Markets reiterated an Overweight rating on META stock after the report and raised their price target from $540 to $560.
“We believe Meta’s 2Q print has strengthened its core business of seeing AI returns today, while AI assistants and agents create returns over the medium term,” they said.
“As AI creates greater efficiencies for merchants around the world, we believe it can drive further market share gains and support consistent annual advertising revenue growth of more than 10%.”
Similarly, Stifel analysts also raised their price target on Meta stock from $550 to $590, noting that the higher low end of the capex outlook was the “only real wrinkle” from the chart.
“It’s hard to deny that the increase in capex is substantial, but we believe Meta’s AI initiatives are already paying off (better engagement, tools for advertisers driving higher budgets), with more to come,” Stifel wrote.
Yasin Ebrahim contributed to this report.
