Meta shares surge after Facebook ekes out user growth, beats Wall Street targets on profit
- Total revenue, the bulk of which comes from advertising sales, rose 7 per cent to US$27.91 billion in the first quarter
- Meta is slowing the pace of some longer-term investments in its AI infrastructure and Reality Labs hardware division
Facebook rebounded from a drop in users early this year and its parent Meta posted a profit ahead of Wall Street targets, defying low investor expectations with a quarterly report that sent shares up 20 per cent.
Meta Chief Executive Officer Mark Zuckerberg also said that the company would scale back costs and was investing in artificial intelligence tools to improve recommendations and ads, a sign Meta is buckling down to make money while working on its long-term ambitions to build the metaverse.
Its stock rose 19 per cent in after-hours trade on Wednesday.
Meta’s profit soundly beat Wall Street targets at US$2.72 per share, compared with an average analyst estimate of US$2.56, according to IBES data from Refinitiv. The earning beats were tempered by Meta recording its slowest revenue growth in a decade.
Facebook daily active users (DAU), a key metric for advertisers, were 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv. Monthly active users came in at 2.94 billion, missing Wall Street estimates by 30 million.