Meta’s AI Gold Rush: 21% Growth and Record Margins Drive Investor Frenzy

Meta’s AI Gold Rush: 21% Growth and Record Margins Drive Investor Frenzy

Meta Platforms delivered a blockbuster second quarter, beating Wall Street’s expectations as artificial intelligence powered both top- and bottom-line gains. The company reported revenue of $47.52 billion, up 22% year-over-year, while operating margins expanded to 43%—the highest level in at least a decade.

AI Supercharges Advertising Returns

Advertising revenue, which accounts for the lion’s share of Meta’s business, jumped 21% to $46.5 billion. That surge was fueled by a combination of 11% growth in ad impressions and a 9% increase in average price per ad, as AI-driven tools like Advantage+ campaigns boost both engagement and ROI for more than 4 million advertisers.

Cash Flow and Capex: Fueling the Future

Meta generated $8.55 billion in free cash flow this quarter, giving it ample firepower to bankroll its next wave of innovation. At the same time, capital expenditures soared to $17.01 billion, part of a plan to invest roughly $140 billion in data-center and AI infrastructure over the next two years—an outlay that eclipses similar commitments by Google and Microsoft combined.

Investor Perspective: Balancing Opportunity and Risk

Analysts are split on whether Meta’s aggressive investment spree will pay off. “They clearly can afford it,” says one unnamed tech-sector strategist, “but the real question is whether these bets will deliver acceptable returns.” The company’s ability to translate massive AI outlays into sustained free cash flow will be the key metric to watch in coming quarters.

Meta’s blend of blistering ad growth and record-high margins underscores why investors are piling in. Yet as the AI arms race accelerates, the market will be watching closely to see if Meta can turn today’s record spending into tomorrow’s long-term leadership.