01 August 2024
If you are covering Meta’s latest financial results, please find below a comment from Ben Barringer, technology analyst at Quilter Cheviot:
“Meta has once again proven its credentials for a business that has transformed itself in the past couple of years and one that is capable of continuing to leverage the big trends of the day. Its latest results were a solid beat and raise with its profit margin continuing to grow as the business increases revenues at a faster rate than its costs. Crucially for Meta it now has very established core products in Facebook, Instagram and WhatsApp, which people are re-engaging with, while newer sources of revenue such as Threads also do well. Advertising is also holding up, especially in Asia where the likes of Temu and Shein have been aggressive in their marketing spend through Meta’s platforms.
“Furthermore, Meta has increased its guidance for capex, with more money being ploughed into artificial intelligence. Meta looks to be a big winner in this space with its abilities to not only improve the user experience, but also provide better ad targeting for businesses and act as a content generator for smaller firms. It is also exploring use cases for non-core areas to increase that optionality and become the one stop shop for businesses. There is every possibility that Facebook in particular can become the marketing department of small businesses.
“Meta is also taking a very pragmatic approach to AI, ensuring that the investment case is solid, costs are managed appropriately and the risk of failure is low. With these three pillars in place, and the fact it trades at a cheaper valuation than Alphabet, investors will continue to cheer the good news coming out of Meta for some time to come.”
