As the company anticipated quarterly revenue far above analyst projections, Meta Platforms Inc (META.O) CEO Mark Zuckerberg claimed on Wednesday that AI was assisting the business in increasing traffic to Facebook and Instagram and generating more income from ad sales.
In addition to exceeding expectations for the first-quarter profit and revenue, which increased for the first time in over a year, Meta also lowered its cost outlook range for the year, indicating that spending may be lower than the firm anticipated in March.
The company has undergone a number of pricey overhauls to support its primary business, including a sizable effort to increase AI capacity. The corporation has been sluggish to implement AI-friendly hardware and software systems for its main operation.
The value of Meta shares increased by nearly $50 billion in after-hours trading, continuing a rise in tech shares that began after Microsoft Corp. (MSFT.O) and Alphabet Inc., the parent company of Google (GOOGL.O), and Alphabet Inc. (GOOGL.O) reported solid results on Tuesday.
According to Meta, time spent on Instagram climbed by 24% between January and March.
According to James Cordwell, analyst at Atlantic Equities, “I think similar to Alphabet, a lot of Meta’s AI investments have gone into the advertiser side. Cordwell says the results of their efforts as consumers may be seeing, but it appears that they are able to utilise more sophisticated algorithms to retain a certain level of ad targeting.
In order to achieve Zuckerberg’s objective of making 2023 the “year of efficiency,” Meta has also started a vigorous cost-cutting push with plans to remove 21,000 people and flatten its middle-management structure.