Meta could be the first major tech company this earnings season to foreshadow higher-than-expected AI costs for next year A series of successful artificial-intelligence launches has given Meta Platforms fresh momentum heading into its third-quarter earnings report on Wednesday — and a reason to spend more. After being written off as an AI laggard for much of the past year, Meta shocked investors with the breakout success of its Muse agent and the recent launch of its Muse Wonder models. Shares of Meta have risen 14% since the launch of Muse in early September.
The company is “back on offense with AI,” Bank of America analyst Justin Post wrote in a note last week, adding that further details about Muse adoption will be a main area of focus for the earnings call. Why humanoid robots are so hard to mass-produce Play video: Why humanoid robots are so hard to mass-produce Wall Street analysts polled by FactSet expect $63.34 billion of revenue and adjusted earnings of $6.53 for the quarter that ended on Sept. 30. Bank of America has projected a slightly higher number at $63.8 billion and noted that buy-side expectations — or those from investors at large institutions — could be closer to $64 billion.
Don’t Short Yourself offers weekly money tips to help you earn it, stack it and grow it. I would like to receive updates and special offers from Dow Jones and affiliates. I can unsubscribe at any time. **More**: Meta is back on the AI leaderboard with its new family of Wonder models The path to translate Meta’s newfound AI credibility into financial gains isn’t entirely clear, though.
The success of Muse won’t be immediately apparent in this quarter’s results, according to analysts. The app features a generous free usage option along with paid subscription tiers, and Meta plans eventually to monetize the agent by taking a cut of sales facilitated by the agent. For now, investors will be interested in hearing about Muse usage trends, especially whether consumers are willing to open their wallets for the agent.
The cost of running Muse per user will also be an area of interest, Post added. Thill flagged barriers to adoption of agentic commerce, or the idea that bots could make purchases on behalf of users. Some companies have banned agents from accessing their platforms and behaving in this way.
However, Thill voiced optimism that Meta’s latest Muse Wonder models will appeal to both personal and business agents, with significant revenue potential for enterprise use cases. But behind the success of Meta’s AI offerings is likely an increase in costs to serve these products. As the first “Magnificent Seven” company to report earnings, Meta will set the tone for the other Big Tech companies that are investing heavily in AI.
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