Key facts
- Meta reported Q2 revenue of $61 billion, a 28% increase year-over-year, but profits fell 14% to $6 billion.
- The company plans to spend $130 billion to $145 billion this year, primarily on AI projects.
- Meta's free cash flow for the quarter was $784 million, the lowest in at least five years.
- CEO Mark Zuckerberg expressed optimism about AI investments and plans to sell AI technology to other businesses.
- Meta is developing AI agents and aims to build a significant business selling AI models and services to other companies.
Meta shares plunged 11% as investors reacted negatively to the company's significant and accelerating spending on artificial intelligence (AI) projects amidst dwindling profits. While revenue grew 28% year-over-year to $61 billion in the second quarter, profits fell 14% to $6 billion. The company plans to spend between $130 billion and $145 billion this year, a substantial increase from previous forecasts, with a large portion dedicated to AI. Meta's free cash flow hit a five-year low of $784 million.
CEO Mark Zuckerberg expressed confidence that these AI investments are accelerating the core business and highlighted plans to start selling AI technology, including its Muse Spark AI model and related services, to other businesses. He described AI agents as the next wave of Meta's product line. However, this push for AI monetization comes as the company faces scrutiny over its impact on younger users and is entangled in approximately 3,000 lawsuits alleging harm to children.