Meta's AI spending, Muse assistant adoption in focus for quarterly results

Oct 20 (Reuters) - Meta's massive ‌artificial intelligence outlays ​and ​adoption of its Muse personal assistant will be in focus when it reports third-quarter results on Wednesday, as the social ‌media firm seeks to show that its AI investments can ⁠sustain growth.

The company has rolled out several AI products and services targeting businesses as ‌CEO Mark Zuckerberg looks to ‌create a new revenue stream beyond advertising to compete better in the AI race with OpenAI and Anthropic.

• Positive reception for Meta's Muse ​assistant, which offers subscriptions, and its latest AI models have boosted investor confidence in the company's AI strategy, as Meta commits hundreds of ⁠billions of dollars to expanding its AI infrastructure

• "Recent AI launches have strengthened confidence in the company's ​AI execution," BofA Global Research analysts said, adding that its survey also suggests healthy ad demand in the quarter

• ​Analysts estimate Meta's capital expenditure more than ‌doubled to $41.68 billion in the September quarter, according to Visible Alpha data

• The rising spending had squeezed its ⁠free cash flow in the second quarter and analysts expect it to report a cash burn of $8.52 billion in the third quarter

• Morgan Stanley analysts raised their ⁠earnings estimates for 2027 and 2028 for Meta despite higher spending, citing stronger ad ​growth and the potential for new AI products to generate additional revenue

• Wall Street expects Meta to report a decline of about 17% in net income to $15.44 billion, ‌according to data compiled by LSEG

• Meta is set to report revenue growth of 23.8% to $63.42 billion, slowing ‌from about 28% in the previous quarter amid intense competition from Google ⁠and TikTok

• Shares of the company ‌have gained about 7% ​this year, underperforming a roughly 12% rise in the benchmark S&P 500

(Reporting by Jaspreet Singh in Bengaluru; Editing by ‌Devika Syamnath)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Wells Fargo says S&P 500 buy signal emerges as investors turn excessively bearish
• GE Aerospace beats estimates, raises guidance on strong demand
• Onto Innovation (ONTO) Reiterated at Overweight by Cantor Fitzgerald - 'Remains a Top Pick'