Meta and Alphabet crush Q2 earnings, fueled by AI-driven ad growth
Meta’s Q2 sales jumped 22% year-over-year to $47.52 billion. CEO Mark Zuckerberg credited AI for boosting efficiency and revenue in its ad system.
Meta CFO Susan Li said Asian ecommerce firms and small North American advertisers increased ad spending after a slow April linked to tariffs and trade changes. 
Meta CEO Mark Zuckerberg said during the earnings call that AI helped imbue “greater efficiency and gains across our ad system,” thus contributing to the 22% year-over-year increase of second-quarter sales that hit $47.52 billion.
Meta finance chief Susan Li also told analysts during a follow-up earnings call on July 30 that the online ad market appears to have improved since April.
“We generally expect another quarter of healthy advertising demand,” Li added.
Tech analyst Gil Luria pointed out the optimism in digital ads, tying it to steady consumer spending.
“Today, digital advertising in general, is doing well; It is simply an extension of the fact that the consumer is still strong.”
eMarketer’s Jasmine Enberg stressed that AI investments pay off when core business is strong.
“I think one of the things that its earnings taught us was that you can spend a lot of money on AI when your core business is doing well, and especially when your core business has been already benefiting from the investments that you’ve made in AI.”
Both Meta and Alphabet are ramping up AI spend. Alphabet raised its 2025 capital expenditure forecast by $10 billion to $85 billion. Meta nudged the low end of its 2025 capex up to $66 billion.
Investors shrugged off massive AI spend as sales kept climbing.
Reddit stole the spotlight, with Q2 sales hitting $500 million—a 78% surge that lifted its stock over 20%. The company rebounded after earlier user growth woes linked to Google search changes.
Meanwhile, Snap and Pinterest underwhelmed. Snap’s sales rose just 9% and missed revenue per user estimates due to a flawed ad platform update. Pinterest shares dropped 10% after missing EPS, citing tariff impacts and market uncertainty.
Snap CEO Evan Spiegel flagged Reddit as a new competitor in its latest SEC filing—marking an emerging rivalry.
“They kind of rose back like a phoenix and had some extraordinary results,” Luria said about Reddit.
Pinterest finance chief Julia Brau Donnelly said Asia-based ecommerce retailers cut US ad spend, unlike Meta’s experience.
“There’s very little room for mistakes or missteps,” Enberg said on the small ad platform struggles.
The tech ad market is heating up, with AI-driven growth lifting giants while smaller peers fight for footing.
Watch: Tech growth rates are holding strong.
Video: Tech growth rates are remaining robust, says Evercore’s Mark Mahaney
