Thanks To AI Meta Platform Inc. Income, Now It's Higher

Meta Platforms Inc CEO, Mark Zuckerberg, thanked AI. (photo: Instagram @zuck)

JAKARTA - Meta Platforms Inc CEO Mark Zuckerberg said on Wednesday April 26 that artificial intelligence (AI) helps companies increase traffic to Facebook and Instagram as well as increase advertising sales, as companies expect quarterly revenues well above analyst expectations.

Meta shares rose 12% in trading after working hours, adding more than $50 billion to the company's market value and continuing the tech stock rally that began after Google's parent Alphabet Inc, and Microsoft Corp announced strong results on Tuesday, April 25.

Meta narrowed the estimated cost range for the year, saying spending could be lower than the company's forecasts in March, and also beating expectations for first-quarter earnings and revenues, which rose for the first time in nearly a year.

The company, which has been slow in adopting AI-friendly hardware and software systems for its main businesses, has made some expensive reshuffles to strengthen its core business, including large projects to increase AI capacity.

"At this point, we are no longer left behind in building our AI infrastructure," Zuckerberg said in a conference call. "On the other hand, we now have the capacity to do the leading work in this space on a scale."

According to Meta, AI's recommendation increased the time spent on Instagram by 24% in the January-March quarter.

"I think, just like Alphabet, a lot of AI Meta investments have been made on the advertiser side," said James Cordwell, analyst at Atlantic Equities. "So as consumers, maybe we don't see the outcome of their efforts in that field, but it seems they are capable of using more sophisticated algorithms to maintain certain ad targeting rates."

Meta has also started an aggressive cost-cut effort, with plans to eliminate 21,000 jobs and level its medium management structure as it works towards Zuckerberg's goal of making 2023 a "year of efficiency".