Meta, the parent company of Facebook and Instagram, reported impressive figures for the second quarter of 2024. Revenue increased by 22 percent to $39.1 billion, exceeding analysts' expectations. Net profit rose by 73 percent to $13.5 billion. These results are likely to dispel any concerns shareholders may have had about the high expenditures on artificial intelligence (AI).

The company earns almost all of its revenue from advertising. The solid figures show that Meta has found a successful application for AI: Efforts to sell more targeted ads are paying off. Meta's Advantage+ allows businesses to automate parts of their advertising campaigns and is gaining popularity, helping to draw advertising dollars away from smaller rivals like Pinterest.

AI also helps Meta to better decide which ads should be shown to users on its platforms and when. By improving the so-called monetization efficiency, Meta can increase revenue and conversions without having to show more ads, which could upset users. This is reflected in the higher prices Meta was able to charge for ads in the past quarter. A healthy increase in the operating margin to 38 percent more than sufficiently compensated for the increased costs and expenses.

These positive results make Meta's plans to "significantly" increase capital expenditures next year more palatable for investors. The company stated it could invest up to $40 billion this year in expanding AI computing capacities. The saying "You have to spend money to make money" applies here. The battle for advertising dollars will only become more intense as companies like JPMorgan, Walmart, and Uber push into the digital advertising market. Meta, which controls more than a fifth of the $300 billion annual U.S. digital advertising market, needs to defend its position.

Here's the translation of the provided heading to English:

"Meta's shares, which have risen 47 percent over the last 12 months, gained 7 percent in after-hours trading. In contrast, the shares of Alphabet and Microsoft, which also announced plans to increase AI spending, fell. Despite the gains, Meta shares are not particularly expensive with a 22-times price-earnings ratio compared to Alphabet and below Microsoft's 32-times ratio.

Here's the translation of the heading to English:
"Increasing losses in the Reality Labs unit, which manufactures Quest mixed reality headsets, along with regulatory concerns and questions about the sustainability of advertising expenditures by Temu and Shein, are weighing on the company, but further signs that Meta is finding ways to monetize its AI investments should help narrow this gap.