"The metaverse has been a money pit so far, and there's a good chance it will never pay off in a meaningful way. AI, on the other hand, is already providing legitimate value for Meta. The social media company has integrated AI tools into its ad products, enabling companies to optimize ad designs, set up automated rules that pause or boost ads based on performance, and receive AI-powered ad insights."
"These tools have contributed to better ad engagement, higher prices, and more money for Meta. Ad impressions were up 14% year over year in the third quarter of 2025, and the average price per ad increased by 10% year over year. Revenue for the first three quarters of the year was $42.3 billion (a 16% year-over-year increase), $47.5 billion (a 22% increase), and $51.2 billion (a 26% increase)."
Meta's stock fell 22% after its third-quarter earnings report amid significant AI spending and plans to increase 2026 investments. Investors worry AI could become another costly metaverse effort, which has cost over $70 billion since 2021. AI tools integrated into Meta's ad products are improving ad design, automating performance rules, and delivering AI-powered insights. Those tools have driven higher ad engagement, a 14% rise in ad impressions, a 10% increase in average price per ad, and sequential revenue growth in the first three quarters. Trailing free cash flow of $44.8 billion enables continued AI investment.
Read at The Motley Fool
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