Latest news with #MarkZuckerberg
CNBC
4 minutes ago
- Business
- CNBC
What top Wall Street analysts are watching in Meta's earnings out Wednesday
Wall Street remains bullish on Meta Platforms' longer-term strategy, but analysts remain watchful of how the company's artificial intelligence efforts could weigh on its second-quarter results out Wednesday. Meta shares have rallied 20% this year through Tuesday, more than twice the return in the S & P 500, as concerns about economic growth, inflation and tariffs have dissipated. Of the 77 analysts covering Meta, 63 rate it either either a buy or a strong buy. Only seven have a hold rating. While sentiment remains strong, some analysts expect Meta's recent AI spending spree and $14.3 billion ScaleAI investment to potentially overshadow second-quarter earnings. Revenue growth in the period likely slowed to 15%, down from 22% a year ago, according to LSEG. Investors will listen closely to Meta CEO Mark Zuckerberg's explanation for the Instagram parent's shifting AI strategy. Take a look at how the Street is positioned toward Meta ahead of results: Morgan Stanley: overweight rating, price target to $750 from $650 Analyst Brian Nowak sees generative AI driving higher monetization and engagement levels and, eventually, faster revenue growth. Among the keys to Meta outperforming in the second half of the year are the launch of its next-generation Llama AI models and new AI products "to help the market better understand the [return on invested capital] of the recent heavy hiring and capex investments," he said. "We raise our revenue estimates 3%/6% in '25/'26 driven by better-than-expected ad checks as tariff concerns alleviated, continued GPU enabled ad innovation, and improving FX dynamics," Nowak wrote in a July 20 note to clients. "These higher top-line estimates flow through to the bottom line as we raise EPS 5%/7% in '25/'26. With these changes, we arrive at a $750 PT after rolling our valuation to mid-year." Bank of America: buy, $775 price target Analyst Justin Post's price target implies Meta shares could rise another 11% from Tuesday's close of $700. "With AI [return on investment] a key stock sentiment driver, 2Q positives could include: 1) Ad rev upside reinforcing confidence in Meta's AI ad engine, 2) strong road map for 2H ad products, 3) optimism on new revenue opportunities for AI (Llama licensing, subscriptions, etc.) With Street likely anticipating 2Q revenue upside, risks are high [that] expectations and higher expenses offset revenue revisions. Also, EU regulatory uncertainty is likely to continue," Post wrote in a note late last week. Post added that he continues to see Meta as "one of the best AI opportunity stocks, with potential revenue upside as AI capabilities are integrated into the ad stack." Jefferies: buy, price target to $845 from $790 The investment bank remains bullish on Meta, but said that Facebook Reality Labs investments should weigh on the company's near-term profit margins. Meta's ScaleAI investment and AI hiring spree could also pressure earnings, analyst Brent Thill said in a July 16 note. "AI hiring spree signals urgency, though near-term margin pressure is likely. Capex to remain elevated ($68.6B/$74.2 in FY25/26) but bullish on its LT ROI," Thill wrote, adding that new ad dollars are already pouring into Meta's mobile ad campaigns and that the company is seeing "deep engagement" across its Instagram, Messenger and WhatsApp platforms. Rosenblatt Securities: buy, $918 price target Analyst Barton Crockett's price target suggests Meta shares might rally another 31% from Tuesday's close. Crockett said that Meta's free cash flow should get a boost from the tax credits for capital spending in the Trump administration's One Big Beautiful Bill Act. Meta "is spending many tens of millions of dollars to hire an all star AI staff. That spending could pose a risk to the P & L, or perhaps be a sign that CEO Mark Zuckerberg is confident in AI-driven cost savings to spend the money without blowing up Meta's cash flow," Crockett said in a July 22 note. Deutsche Bank: buy, $770 price target Meta's "AI talent war [is] center stage," analyst Benjamin Black wrote in a July 21 note to clients. "AI enhancements via Advantage+ are increasingly manifesting themselves in the form of improved return on ad spend (ROAS), which we expect will be a durable source of growth for Meta going forward, as Advantage+ becomes the default campaign-setup across more advertisers this year," Black said. "Additionally, deep auction dynamics are largely offsetting the impact of any large buyers exiting, with e-commerce spend growth on Meta accelerating in May and June, returning to pre-liberation day levels after the drop-off in April."
Mint
4 minutes ago
- Business
- Mint
Mark Zuckerberg announces vision for AI, says, ‘Building superintelligence for everyone!'
Meta has publicly outlined its vision for the future of artificial intelligence, stating that the company is focused on developing "personal superintelligence" aimed at individual empowerment rather than centralised automation. In a new statement, Meta said that recent advances in AI have begun to show early signs of self-improvement, marking a significant turning point in the development of advanced systems. While progress remains gradual, the company believes that the emergence of superintelligence is now within reach. Moreover, Meta's Chairperson Mark Zuckerberg said on his Instagram account, 'We're building personal superintelligence for everyone. Stay tuned.' He argues that this new phase of AI will not only enhance existing systems but also open doors to innovations previously beyond imagination. The company sees the coming era as a continuation of historical technological trends, comparing it to the shift that occurred during the Industrial Revolution, when society moved away from subsistence farming toward more varied human pursuits. Rather than using AI solely to automate labour and distribute its output, as some industry players propose, Meta advocates for a model where individuals are equipped with AI tools tailored to their personal goals. According to the company, personal superintelligence could help users pursue their ambitions, build meaningful relationships, explore creative avenues, and navigate daily life more effectively. 'People pursuing their individual aspirations is how we have always made progress,' the statement read. Meta claims that such an approach will be vital in the years ahead, particularly as AI becomes more deeply embedded in everyday life. A key element of the company's strategy involves integrating AI into wearable devices, such as augmented reality glasses, which it says could become the primary computing tools of the future. These devices would be capable of understanding users' surroundings and needs in real-time, supporting continuous, context-aware interaction. Meta also acknowledged the risks that come with developing superintelligent systems. The company stressed the importance of addressing safety concerns and being selective about what is made open source, citing the need for caution in a rapidly evolving landscape.
CNBC
an hour ago
- Business
- CNBC
Meta slated to reported second-quarter earnings after the bell
Meta is set to report its second-quarter earnings on Wednesday, with analysts eyeing any changes to the company's costs and related guidance amid CEO Mark Zuckerberg's recent artificial intelligence hiring blitz. Here's what analysts polled by LSEG are expecting: Investors are likely to be monitoring any comments from Zuckerberg about his company's recent spending on AI and how that technology might benefit Meta's core online advertising business. Meta kicked off its AI hiring bonanza in June when it invested $14.3 billion into Scale AI, landing the data-annotating startup's CEO Alexandr Wang to co-lead the new Meta Superintelligence Labs as the company's chief AI officer. Zuckerberg undertook the AI strategy overhaul to help the company regain momentum after lukewarm developer response to its Llama 4 AI model, CNBC reported Tuesday. Cantor analysts wrote that they do not expect Meta's AI hiring spree will affect the company's 2025 projections for total expenses, estimated to fall in the range between $113 billion and $118 billion. If anything, Meta's AI hiring blitz could move "the target above the low end," the Cantor analysts wrote. Zuckerberg said in July that the company would invest "hundreds of billions of dollars" into computing infrastructure for its AI endeavors, but the company hasn't officially revised its 2025 capital expenditures since April. That month, Meta said its 2025 capital expenditures would come in the range of $64 billion to $72 billion, which was an increase from its previous outlook of $60 billion to $65 billion. Analysts at BofA Securities said in a research note published Friday that there are signs that Meta could post second-quarter sales at or above the high end of the company's previous guidance of $42.5 billion to $45.5 billion for the period. Those positive signs include an increase of advertising spending from brands during the quarter and Google's strong quarterly earnings results from last week, the analysts wrote, which implies that Meta, second only to Alphabet in digital advertising, could also post solid results.
Engadget
2 hours ago
- Business
- Engadget
Mark Zuckerberg shares a confusing vision for AI 'superintelligence'
Mark Zuckerberg has spent the last several months and several billion dollars recruiting prominent AI researchers and executives for a new "superintelligence" team at Meta. Now, the Meta CEO has published a lengthy memo that attempts to lay out his big plan for using the company's vast resources to create "personal superintelligence." In the memo, which reads more like a manifesto than a strategic business plan, Zuckerberg explains that he's "extremely optimistic that superintelligence will help humanity accelerate our pace of progress." The technology, according to him, "has the potential to begin a new era of personal empowerment where people will have greater agency to improve the world in the directions they choose." Zuckerberg, who has previously expressed a desire to build artificial general intelligence , never defines "superintelligence." Nor does the 616-word memo explain how Meta plans to create such a technology, what it might help people accomplish or why anyone should trust the company to build it. Instead, he implies that Meta will be a better steward of this non-specifically powerful AI than "others in the industry" who expect "humanity will live on a dole of its output." As profound as the abundance produced by AI may one day be, an even more meaningful impact on our lives will likely come from everyone having a personal superintelligence that helps you achieve your goals, create what you want to see in the world, experience any adventure, be a better friend to those you care about, and grow to become the person you aspire to be. Meta's vision is to bring personal superintelligence to everyone. We believe in putting this power in people's hands to direct it towards what they value in their own lives. This is distinct from others in the industry who believe superintelligence should be directed centrally towards automating all valuable work, and then humanity will live on a dole of its output. At Meta, we believe that people pursuing their individual aspirations is how we have always made progress expanding prosperity, science, health, and culture. This will be increasingly important in the future as well. Left unsaid by Zuckerberg, is the fact that the memo comes at a time when he's been rapidly reorganizing Meta's AI teams. Last month, the company invested $14.8 billion into Scale AI, a move that allowed it to bring Scale CEO and founder Alexandr Wang into the company. The 28-year-old founder is now Meta's Chief AI Officer in charge of its superintelligence efforts. Meta has also been on a hiring spree for the effort, and has reportedly been offering prominent researchers eight- and nine-figure pay packages to come to Meta. In recent weeks, the company has successfully recruited high-profile talent from Apple and OpenAI , including Shengjia Zhao, who helped created GPT-4. Zhao announced last week that he will take on the role of "chief scientist of Meta superintelligence labs." Just yesterday, Wired reported that Meta has recently turned its recruiting efforts to Thinking Machines Lab, an AI startup founded by former OpenAI CTO Mira Murati, and that in at least one case it made an offer worth more than $1 billion over several years. (Meta PR said some details of that report were "off.") All that is on top of the $72 billion Zuckerberg has said Meta plans to spend on AI infrastructure. Driving all this is that Zuckerberg has reportedly grown increasingly frustrated by Meta's own generative AI efforts. The company has had to delay its larger "Behemoth" Llama 4 model by months. Llama's struggles have also reportedly caused Zuckerberg to question whether Meta's AI efforts should remain open source, according to CNBC . It's also likely no coincidence Zuckerberg's rambling manifesto comes hours before the company is scheduled to report earnings and tell analysts more about its plans to spend billions of dollars on new AI efforts. Meta's CEO also clearly sees AI dominance as an opportunity to end the company's reliance on mobile platforms, especially Apple, which he believes have been able to exert too much control via their app stores. In his memo, he explains that "personal devices like glasses … will become our primary computing devices." A future where smart glasses are more important than smartphones would, of course, be extremely convenient for Meta, which has spent the last several years building smart glasses.
CNBC
2 hours ago
- Business
- CNBC
Zuckerberg shares AI 'personal superintelligence' vision after spending billions on top talent
Meta CEO Mark Zuckerberg published a letter outlining his vision for "personal superintelligence" Wednesday, giving investors a glimpse into his artificial intelligence strategy ahead of Meta's second-quarter earnings report. The company has shelled out billions of dollars hiring top AI researchers and engineers in recent weeks, and Wall Street will be listening for what Zuckerberg has to say about the spending spree. Zuckerberg did not outline specific products or applications that Meta plans to build in his letter, but he said he views superintelligence as a tool for "personal empowerment" over automation and efficiency. "This is distinct from others in the industry who believe superintelligence should be directed centrally towards automating all valuable work, and then humanity will live on a dole of its output," Zuckerberg wrote. Meta has been racing to keep up with competitors like OpenAI and Google. In June, the company announced plans to invest $14.3 billion into Scale AI and hired its CEO Alexandr Wang. Weeks later, Zuckerberg revealed a new business unit called Meta Superintelligence Labs, where employees will work on foundation models such as the open-source Llama family of AI models, products and Fundamental AI Research projects. Wang is leading the lab as Meta's chief AI officer, and the company has also recruited talent from Anthropic, OpenAI and Google. "The rest of this decade seems likely to be the decisive period for determining the path this technology will take," Zuckerberg wrote, "and whether superintelligence will be a tool for personal empowerment or a force focused on replacing large swaths of society."
