Meta Reports Strong Ad Revenue Growth Amid Rising Concerns Over AI Spending
Meta reported a significant increase in advertising revenue for Q2 2026, growing by 27% year-over-year to $59.4 billion and total revenue rising 28% YoY to $60.8 billion. The company attributed the growth to its AI investments, particularly Advantage+, which reached an annualized run rate of $75 billion in Q2. Despite exceeding revenue expectations, Meta's earnings fell short of Wall Street forecasts, leading to a decline in share price. Meta faces skepticism over its aggressive spending on AI infrastructure and provided a weaker-than-expected Q3 forecast between $61 billion and $64 billion. CFO Susan Li noted that the company is facing headwinds from policy changes in Europe limiting personalized ads and lapping strong ad impressions growth. Executives emphasized how Meta's AI tools are improving monetization efficiency, but analysts remain cautious about whether these initiatives represent diversification or distraction. Meta also reported a 73% YoY increase in 'other' revenue to $1 billion for the first time, driven by WhatsApp paid messaging and subscriptions. However, this remains relatively small compared to its ad business. The company raised its full-year capital expenditure forecast due to increased AI infrastructure costs.
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