Meta Platforms Stock Soars: The Unstoppable Rally Explained

Meta's shares are defying gravity—again. Here's why Wall Street can't look away.

The Zuck Effect: AI Bets Paying Off Big

Meta's aggressive pivot to AI infrastructure—while rivals flounder—is finally moving the needle. Threads’ user growth? Just the appetizer.

Ad Dollars Flooding Back

Advertisers are voting with their budgets as Meta’s targeting gets creepily precise. Privacy regulations? More like gentle suggestions.

Reality Check (Literally)

Quest 3 sales beat estimates, proving consumers will trade personal data for shiny VR headsets. The metaverse dream isn’t dead—it’s just monetizing differently.

Another quarter, another earnings beat. Will the momentum last? Ask the algos—they’re running the show now anyway.

Meta's ad business is stronger than ever

The second-quarter earnings report showed that the company's huge base of daily active users (DAUs) is still growing, up 6% year over year (YOY). This, along with efficiency gains that the company attributed to AI, drove huge growth in earnings and sales.

Earnings per share (EPS) jumped 38% YOY to $7.14, well above the analyst consensus estimate of $5.88 for the quarter. Its top-line revenue reached $47.5 billion, a 22% jump YOY, handily beating Wall Street's $44.8 billion target.

Image source: Getty Images.

CEO Mark Zuckerberg explained this success by saying, "The strong performance this quarter is largely thanks to AI unlocking greater efficiency and gains across our ad system."

That's a good thing for investors to hear, considering Meta spent $31 billion on AI in the first half of this year alone, and it doesn't plan to stop anytime soon. Chief financial officer Susan Li told investors that Meta expects to ramp up its investments significantly in 2026.

Meta looks healthy

Meta appears to be firing on all cylinders and reaping the benefits of AI while investing heavily in its future. Its enormous cash flows will allow it to do so more or less indefinitely, or at least until shareholders' appetite wanes.

If these sorts of efficiency gains continue, however, I don't see that happening. Even after today's spike, Meta is a buy.