Meta's AI Strategy Shows Early Success as Revenue Climbs 26%

Meta reported third-quarter earnings with revenue up 26% to $64.6 billion, while adjusted operating margins fell 500 basis points to 35% due to rising AI-related costs, signaling early success in monetizing its AI investments. The company saw healthy growth in its core advertising business, with impressions up 10% and prices up 14%, driven by AI improvements. Muse adoption reached 10 million users in its first month, spanning consumer and enterprise applications. Meta maintains its $850 fair value estimate and is viewed as undervalued despite rising shares. The firm has multiple AI monetization avenues, including ads, enterprise intelligence, compute sales, and agentic commerce, though some revenue streams remain outside current models.