Meta continues to deliver solid results amid strong digital advertising demand. We expect the firm to generate strong cash flow regardless of how AI evolves, although returns on infrastructure investment are uncertain.
Revenue increased 22% to $39.1 billion in Q2 due to impressive ad pricing, even as user growth and ad impression growth slowed slightly. Ad demand was broad-based.
Meta's operating margin held at 38%, up from 29% a year ago, thanks to lower costs. Capital spending is expected to grow significantly in 2025.
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