Meta Platforms reported robust Q2 earnings with $39.1 billion in advertising revenue, reflecting a 22% year-over-year increase and $18.9 billion in free cash flow. The company's net income was $13.5 billion, exceeding expectations. However, concerns have arisen regarding Meta's increased capital expenditures of $66-$72 billion, largely for AI infrastructure, funded through debt. This shift in financing approach indicates potential risks despite Meta's strong market position, with analysts noting vague timelines for revenue generation from AI investments.
Meta Platforms reported Q2 earnings with advertising revenue of $39.1 billion, a 22% rise year-over-year, along with a net income of $13.5 billion.
The company has increased its capital expenditure guidance to $66-$72 billion for AI infrastructure, indicating a shift towards debt financing.
Despite strong performance, concerns arise over heavy reliance on debt and vague timelines regarding AI revenue generation, raising red flags.
The financing of AI infrastructure represents a significant transition for Meta from a cash-rich company to one more dependent on debt funding.
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