Social media behemoth Meta Platforms reported Q2 2023 earnings and revenue that beat expectations, driven by the company’s successful AI-powered ad campaign. Meta’s stock rallied 9% in premarket trading after the report, trading at $325.53 ahead of Thursday’s market open.

Meta Issues “Monster Guidance” for Q3 2023

Shares of Meta Platforms edged 9% higher in premarket trading on Thursday after the tech giant offered an upbeat revenue forecast that showed a considerable AI impact on the company’s engagement rates and ad sales, despite uncertain economic conditions. The Facebook owner’s stock stood at $325.53 in the pre-open market.

The share price surge came after Meta posted better-than-anticipated earnings and revenue for Q2 2023, driven by a strong recovery in the digital ad market. Meta posted second-quarter earnings per share (EPS) of $2.98, compared to Wall Street estimates of $2.91. Revenue came in at $32 billion, while analysts were looking for $31.12 billion

The solid quarterly report was fueled by growing advertisers’ confidence in “Meta’s enhanced and AI-powered campaign planning and measurement capabilities, and spending more,” said Morningstar analyst Ali Mogharabi. In addition, monetization rates from Reels, Meta’s short-form video offering, are also rising. According to the company’s CEO, Mark Zuckerberg, Reels had an annual revenue run rate of over $10 billion in the latest quarter, up from $3 billion last fall.

Meta expects Q3 revenue to range between $32 billion and $34.5 billion, which Bernstein analysts described as a “monster guidance.” For comparison, analysts surveyed before the Q2 report were guided for Q3 revenue of $31.3 billion, implying year-over-year growth of at least 15%.

Meta Committed to Metaverse Despite Mounting Losses

Even though Meta is currently heavily capitalizing on its AI initiatives, the social media said it remains committed to the metaverse, Zuckerberg said, despite recent headwinds in its virtual world business division.

“Our investments in AI continue. We remain fully committed to the Metaverse vision as well. We’ve been working on both of these two major priorities for many years in parallel now, and in many ways the two areas are overlapping and complementary.”

– Zuckerberg noted.

Zuckerberg’s comments did not come as a surprise, given that the 39-year-old issued a similar statement after Meta’s Q1 report. Reality Labs, the company’s metaverse research unit, reported a $3.7 billion operating loss in the latest quarter after losing almost $4 billion in the previous three-month period.

Earlier this month, Meta launched Threads, a direct competitor to Twitter. The app garnered over 10 million users just several hours after its launch.

This article originally appeared on The Tokenist

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