We increase our Meta-Prix objective a lot of time after a stellar district and an incredible guide
The sharing of Meta platforms skyrocketed on Wednesday evening after the mastodon of the social media delivered what can only be described as an eruption quarter. The only thing better than the reported results was the advice. The turnover of the second quarter ended on June 30 increased by 22% from one year to the next to 47.52 billion dollars, far exceeding the consensual estimate of $ 44.8 billion, according to LSEG. Action profit (BPA) increased by 38% on an annual basis to $ 7.14, which concluded expectations of $ 5.92, showed LSEG data. Meta Ytd Mountain Meta Meta’s Year To-Dame Performance. Meta shares jumped more than 11.5% to reach $ 776 each in exchanges after working hours, which would easily be a new record fence if the title ended on Thursday at these levels. We hold our Hold-Equivalent 2 rating because it is not our style to continue this type of rally. However, we increase our goal of Meta stock market courses to $ 825 per share, compared to $ 800. In the end in the release of Wednesday evening, our main concern concerned the revised prospects of management on spending. After all, we know that CEO Mark Zuckerberg has removed the gloves, ready to wage war with anyone looking to compete in artificial intelligence. With the hike of the spending prospects of the competitor alphabet last week and the recent news of Zuckerberg offering hundreds of millions to those who, according to them, can ensure that Meta is the first to achieve a “super intelligence”, the street was ready for a kind of increase. The concern was that it would be more than investors could not digest. Fortunately, this was not the case. Although the team has increased its prospects for capital expenses and total expenses for the full year, in the middle, they kept the upper end of the previous orientation range for the two intact. Meta platforms why we own it: meta platforms dominating the world of targeted advertising with excellent technology, and its strong user commitment makes it an ideal place to advertise. The company’s scale provides the financial power and the talents of the employees necessary to pursue new growth routes such as artificial intelligence, metavese and virtual and increased reality projects. Improving profitability in recent years has been a boon for profits. Competitors: Alphabet, Tiktok (ownership of Chinese bytedance) and Snap Weet in the portfolio: 4.55% most recent purchase: September 6, 2022 Initiated: May 29, 2014 between expectations to reduce expectations for the reported quarter, the upper surface of the upper cap on the complete expressions of extensions and computer expressions, even at the end of the shares. From the fence on Wednesday, Meta was already up by almost 19% for the year. Given how aggressive management grows in AI, while ensuring that the main activity continues to dominate and grow, we see a lot of space so that the stock works from here. Without forgetting, the action does not seem so expensive compared to the global market, less than 27 times 2026 benefits. These profits estimates will undoubtedly increase higher following the strength of T2, which could send the multiple of the action below 26 years. Commentary This was a phenomenal quarter of Meta, with the income aggravated by a significant expansion of the exploitation margin from one year to another which contributed to a Monster EPS Beat. The force was observed in all key operational geographies, and cash flows were strong enough to support the CAPEX line element slightly higher than it. The most important thing, however, is that Meta continues to cause a strong commitment, with the family of daily applications, active people of more than 6% of one year on the other at 3.48 billion larger than expected. The family of applications segment includes Facebook, Instagram, Whatsapp and Messenger. Zuckerberg noted on the post-benefit call that investments in AI provide more content to the users with whom they can better connect. “The progress of our recommendation systems has so much improved the quality that it has led to a 5% increase in the time spent on Facebook and 6% on Instagram. Just this quarter,” he said. As for advertising, Zuckerberg presented the advantages of business investments in artificial intelligence, with an increase of approximately 5% of advertising conversions on Instagram and an increase of 3% on Facebook, thanks to the enlarged implementation of its recommendation models supplied by AI. “We also see good progress with AI for advertising creation,” he said. “With a significant percentage of our advertising revenues, now from campaigns using one of our AI -generating features. This will be particularly precious for small advertisers with limited budgets.” The press release highlighted growth of 11% over the year of advertising prints in the family of applications, as well as an increase of 9% on the other of the average price per advertisement. The financial director Susan Li also highlighted solid video engagement trends, saying that “Instagram video time was more than 20% from one year worldwide in the world”. She added: “We also see a strong traction on Facebook, especially in the United States, where video time has spent more than 20% from one year to the next.” With regard to WhatsApp, Li noted on the appeal according to which the messaging income paid was the main engine of the 50% increase in so-called other revenues to $ 583 million. However, the advantage of the strong user base seems to go beyond WhatsApp, with the adding that “WhatsApp continues to be the largest request driver because people put Meta directly for tasks such as information collection, assistance to homework and the generation of images outside Whatsapp.” The reality laboratories segment has experienced revenue growth of 5% on the other at $ 370 million, driven by AI glasses sales, but partially offset by the drop in the revenues of quests. However, the division lost $ 4.53 billion in the second quarter, a greater loss than the year, but not as large as expected. Outside the main company, Zuckerberg also sees the progress of artificial intelligence stimulating a more in -depth commitment with Meta AI – the company’s response to Chatgpt – which now has more than a billion monthly active users. “We continue to see a big momentum with our Ray-Ban meta-lunes, with accelerating sales,” he said. Last month, Meta made her New Oakley Meta Smart Glasses debut, the last of the technology giant partnership with Essilorluxottica glasses. Regarding cash yards to shareholders, Meta bought $ 9.76 billion in the quarter and paid $ 1.33 billion in additional dividends. Guidance Meta plans to revenue the third quarter in the range of $ 47.5 billion to $ 50.5 billion, which, even at the bottom of the range, easily exceeds the consensual expectations of $ 46.15 billion, according to LSEG. As mentioned above, the company has raised the decline in its capital forecasts in full year, now aimed at between $ 66 and $ 72 billion, against the anterior range of $ 64 billion to $ 72 billion. The team said, on the press release, that it expects “another year of equally important capital expenses to dollars in 2026 when we continue to pursue opportunities aggressively to provide additional online capacity to meet the needs of our artificial intelligence efforts and our commercial operations”. Meta increased the lower end of its total orientations in 2025 between 114 billion and $ 118 billion, against the anterior range of 113 billion at $ 118 billion. The team expects the rate of growth in total spending in 2026 to be higher than the rate observed in 2025. Although the CAPEX and the total of the expenses follow expectations, according to FactSet, and it seems that it is true of this preliminary guidance commentary 2026, it is clear that the street will allow it, at least for the moment. Meta is a large berth because investments, so far, are clearly paid and help ensure that the company is set up for more in -depth growth in the years to come as artificial intelligence becomes more and more omnipresent in our daily life. (Jim Cramer’s Charitable Trust is long Meta. See here for a complete list of actions.) As abonted at the CNBC Investing Club with Jim Cramer, you will receive a commercial alert before Jim is doing a business. Jim is waiting for 45 minutes after sending a commercial alert before buying or selling a stock in the portfolio of his charitable trust. If Jim spoke of a stock on CNBC TV, he waits 72 hours after issuing the commercial alert before running the trade. 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