Meta's Holiday Surge: AI Investments Fuel Revenue Growth

Meta Platforms has forecasted higher fourth-quarter revenue, driven by anticipated holiday ad spending. Despite its shares falling slightly, AI-driven ad tools and monetization of Reels have boosted growth. Analysts predict an optimistic outlook for digital ads in 2024 due to improving economic conditions and consumer spending.

Meta Platforms, the parent company of Facebook, projected its fourth-quarter revenue to surpass market expectations, largely due to anticipated holiday advertising expenditures. The Menlo Park-based company is banking on robust ad spending to sustain its extensive artificial intelligence investments.

Despite a 2.5% drop in shares during after-hours trading, the company's revenue growth this year has been reinforced by AI-enhanced advertising tools and stronger revenue streams from its short-form video feature, Reels.

Analysts are optimistic about digital advertising prospects in 2024, citing an improved economic outlook with lower interest rates and ongoing consumer spending. With advertising making up the majority of Meta's income, the holiday marketing uptick could substantially impact the company's earnings.

(With inputs from agencies.)