Meta Earnings Preview: Can Traditional Revenue Streams Offset Huge AI Expenses?

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Stocks Analysis by Investing.com (Alessandro Bergonzi) covering: Meta Platforms Inc. Read Investing.com (Alessandro Bergonzi)'s latest article on Investing.com

Despite significant AI investments, Meta still relies heavily on traditional revenue streams, making this earnings report crucial.

Meta has made substantial investments in AI, acquiring around 600,000 H100 GPUs from Nvidia. However, the company's core revenue streams still primarily rely on its traditional platforms like Instagram, Reels, Facebook, and Messenger. Jefferies analysts believe Meta's choice to adopt an open-source model positions the company ahead of its competitors in creating value and reinforcing its AI leadership. They liken Meta’s strategy to the success of Linux, suggesting that Llama could become a foundational element for future AI software.

However, training AI models is expensive and requires substantial electricity, prompting Meta to seek new revenue sources to sustain its open-source approach. Jefferies analysts see several opportunities for Meta to monetize Llama: Understanding when Meta's significant investments will become profitable is crucial for market confidence. Despite turning a corner after its Metaverse bet and exceeding earnings expectations for the past five quarters, Meta's stock slid 15% following the last earnings call.Investors were concerned about the high capital expenditures, which are projected to be between $35 billion and $40 billion, with some sectors yet to monetize these investments.

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ایران آخرین اخبار, ایران سرفصلها

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