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Key Takeaways
- Meta will report earnings after the market closes Wednesday, with investors watching whether the social media giant’s stock can keep up its strong performance so far this year.
- Analysts expect revenue and earnings growth, benefitting in part from AI-driven advertising optimization.
- The Street is overwhelmingly bullish on Meta stock, with most analysts tracked by Visible Alpha holding a “buy” rating and expecting further gains.
Meta (META) will report earnings after the market closes Wednesday, with investors watching whether the social media giant’s stock can keep up its strong performance so far this year.
Analysts expect Meta to post third-quarter revenue of $40.25 billion, surging nearly 18% year-over-year. Net income is projected to land at $13.56 billion or $5.20 per share, up from $11.58 billion or $4.39 per share a year ago.
| Analyst Estimates for Q3 2024 | Q2 2024 | Q3 2023 | |
| Revenue | $40.25 billion | $39.1 billion | $34.15 billion |
| Earnings Per Share | $5.20 | $5.16 | $4.39 |
| Net Income | $13.56 billion | $13.47 billion | $11.58 billion |
Key Metric: Advertising Revenue
Meta shares popped after the social media giant reported in July that it’s seen early gains from artificial intelligence (AI) to optimize user engagement, benefitting its ad business.
Deutsche Bank analysts told clients earlier this month they expect Meta’s AI-driven optimization campaign to continue to bring “durable ad wallet share gains.”
Meta posted advertising revenue of $38.33 billion in the second quarter, with the Street consensus sitting at $39.54 for the third quarter.
Business Spotlight: Artificial Intelligence Advances
CEO Mark Zuckerberg said in July that Meta AI is “on track to be the most used AI assistant in the world by the end of the year.” In September, Meta released Llama 3.2, its most capable open-source AI model yet, in its efforts to compete with Microsoft-backed (MSFT) OpenAI, Alphabet’s (GOOGL) Google, and Amazon-backed (AMZN) Anthropic.
Ahead of the company’s earnings call, Bank of America analysts called the social media giant a “top AI pick,” pointing to strong core ad growth, growing core app usage among younger users, and the capability of the company’s large language model.
All but one of the 31 analysts covering Meta tracked by Visible Alpha hold a “buy” or equivalent rating for the stock, with an average price target of $612.34, implying about 7% upside from Friday’s closing price.
Meta shares have surged more than 60% since the start of the year, finishing Friday at $573.25.
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