Meta is set to release its third-quarter earnings after the market closes on Wednesday, with high expectations from analysts and investors who have watched the stock surge nearly 70% this year. This impressive run has propelled CEO Mark Zuckerberg to the world’s second-richest position, surpassing Amazon founder Jeff Bezos, thanks to Meta’s sustained earnings growth and a forward-looking approach to AI and augmented reality (AR) technologies. With quarterly revenue predicted to reach $40.29 billion, representing an 18% annual increase, all eyes are on Meta’s performance amid a competitive landscape of digital advertising and tech innovation.
Much of Meta’s current momentum is driven by its deep investments in AI, including substantial expenditures on Nvidia’s top-tier graphics processing units. These moves have strengthened Meta’s core advertising capabilities, even as privacy challenges linger post-Apple’s 2021 iOS update. Industry watchers have noted the resilience of Meta’s ad business, with Bernstein analysts recently dubbing it their “set-it-and-forget-it blue chip” in place of Alphabet, citing Meta’s robust fundamentals and cautious yet ambitious AI initiatives. For some, Meta’s consistent results place it in a favorable position compared to peers in the digital ad space, such as Alphabet and Snap, which also posted solid earnings earlier this week.
A key point of focus will be Meta’s future guidance, especially since its revenue growth, while strong, has slightly cooled compared to last year’s figures, when it enjoyed major boosts from advertisers like Temu and Shein. While this revenue dip may spark questions around sustainability, analysts like CFRA’s Angelo Zino have commented on the “tough bar” Meta must meet to sustain this growth trajectory. Meta’s Reality Labs division, a strategic investment in AR technology, will also be under the microscope, as its recent expenses of $4.8 billion vastly outpaced the $353 million it brought in. Yet, Reality Labs remains central to Meta’s future, with Zuckerberg unveiling the Orion AR glasses prototype to much anticipation. The buzz surrounding Meta’s AR projects, particularly when compared to Apple’s Vision Pro headset, highlights the company’s potential to redefine the market for consumer AR products.
Amid its broader tech strategy, Meta’s Ray-Ban smart glasses, a collaboration with EssilorLuxottica, could be another success story. With the holiday season approaching, analysts see potential for these smart glasses to become a popular gift, drawing on the positive reception they’ve received from users.
Meta’s financial and strategic moves underscore its focus on blending advanced AI with AR to stay ahead. As the company continues to invest heavily in next-gen technologies, investors will be watching closely to see how effectively Meta can sustain its growth while pioneering new paths in both advertising and hardware innovation.
