Meta reported a strong 19% increase in Q3 revenue to $41 billion, driven by ad impressions and average prices rising year-over-year, even amidst heavy AI investment.
Management emphasized that investments in generative AI are enhancing user engagement and monetization, with over 500 million utilizing its chat assistant, contributing positively to ad performance.
Despite concerns about high capital expenditures due to AI investments, Meta's advertising model remains robust, leveraging GenAI to improve campaigns and, ultimately, their profitability.
While operating margins experienced pressure from AI spending, we maintain a $560 fair value estimate for Meta, viewing their advertising potential as still promising.
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