Meta excites investors
Facebook parent pays dividend for the first time
February 1, 2024, 11:59 p.m
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Unlike Google, the advertising business for Meta is in full swing. The Facebook Group pays its first dividend and exceeds all expectations with its quarterly figures. Profits skyrocket from four to 14 billion dollars.
On the occasion of the company’s 20th anniversary, Meta wants to pay a dividend for the first time. The Facebook parent said the owners should receive $0.5 per share. She also wants to buy back additional shares worth $50 billion. Meta securities then rose by around 14 percent in after-hours US trading. Thanks to robust advertising revenue, the Internet company surprisingly increased its sales by a quarter to $40.1 billion in the past quarter. The bottom line is that profits jumped from $4.6 billion a year ago to $14 billion: At $5.33 per share, profits were also above forecasts.
“This was one of the most impressive quarters – both in itself and compared to expectations,” praised analyst Mark Mahaney from investment bank Evercore ISI. Analyst Debra Aho Williamson pointed out that the Metaverse and artificial intelligence (AI) technologies promoted by company boss Mark Zuckerberg have so far brought hardly any money into the coffers. “Meta is still a social media company that derives almost all of its revenue from advertising, and advertisers still love Meta.” A few days ago, Google parent Alphabet announced disappointing revenue from online advertising.
Meta is pumping money into the Metaverse and AI
Meta, which also includes Instagram and WhatsApp, is investing billions in AI and the virtual world Metaverse. To do this, the company buys hundreds of thousands of special chips from Nvidia and other providers for the necessary high-performance computers. A few days ago, Zuckerberg wrote in a blog post that the third version of the company’s own language model Llama, with which Meta ChatGPT wants to compete, is currently being trained.
Due to the continued high investments, which the group estimates for the current year at 94 to 99 billion dollars, the operating loss of the “Reality Labs” division, which, among other things, bundles the development of Metaverse and AI, will “increase significantly”. However, thanks to strong sales of the “Quest” data glasses, this division posted record sales of 1.1 billion dollars, about a quarter more than expected.
The topic of AI plays a major role in many companies. Of the companies listed in the US leading index S&P 500, almost 40 percent mentioned this technology at press conferences about their business figures. The frontrunners were Microsoft and Google parent Alphabet, where the terms “AI” or “artificial intelligence” appeared more than 50 times each.