With the S&P 500 index notching a new all-time high, it's not surprising that many of its constituents are doing the same. One of the largest companies in that index is Meta Platforms, the parent company of Facebook, Instagram, and other social media sites.
Meta Platforms runs some of the most successful social media sites, but some may be confused by how this makes so much money. Because these platforms are free to use, investors must realize that the users are the products being sold.
In the second quarter of 2024, Meta's advertising segment generated $38.3 billion in revenue, up 22% year over year. This accounted for 98% of Meta's overall revenue, which clearly controls the company's direction.
Another part of Meta is its Reality Labs division, home of its augmented- and virtual-reality projects. While consumers saw some of these devices come to market as gaming headsets, a lot of potential remains untapped.
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