Facebook’s share price jumped up to nearly 20 per cent after its parent Meta posted a profit. Meta chief executive officer (CEO) Mark Zuckerberg also said that the company would scale back costs and was investing in artificial intelligence tools to improve recommendations and ads, a sign Meta is buckling down to make money while working on its long-term ambitions to build the metaverse.

Its stock rose 19 per cent in after-hours trade on Wednesday.

FACEBOOK REGISTERS PROFIT

Meta’s profit soundly beat Wall Street targets at $2.72 per share, compared with an average analyst estimate of $2.56, according to IBES data from Refinitiv. The earning beats were tempered by Meta recording its slowest revenue growth in a decade, as per a Reuters report.

Facebook daily active users (DAU), a key metric for advertisers, were 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv. Monthly active users came in at 2.94 billion, missing Wall Street estimates by 30 million.

Meta has lost about half of its value since the start of the year, after a dismal February earnings report when Facebook’s daily active users declined for the first time and it forecast a gloomy quarter, blaming ongoing factors including Apple’s privacy changes and increased competition from platforms like ByteDance’s TikTok.

Meta lowered its expected 2022 total expenses to between $87 billion and $92 billion, down from its prior outlook of $90 billion to $95 billion.

Company executives said on the call that Meta was making significant investments in AI and machine learning to improve ad capabilities, as it grapples with the impact of Apple’s changes to its operating system, which have made it harder for brands to target and measure their ads on Facebook and Instagram.