Meta stock surges on strong earnings report; tech giant unveils new shares to bankroll AI spending

Meta shares surged more than 4% in early after-hours trading Wednesday as the Facebook parent reported a 26% jump in quarterly revenue and unveiled plans for a new class of stock that could help finance its massive artificial intelligence spending.Shares of the social media giant jumped 4% to $726 in after-hours trading as of 4:05 p.m.Wednesday, up nearly $30 from their closing price of $697.52.The rally came as Mark Zuckerberg’s company reported third-quarter revenue of $64.6 billion, up 26% from $51.2 billion a year earlier, as advertising sales climbed 26% to $63.1 billion.The Menlo Park, Calif.-based tech giant also forecast fourth-quarter revenue of $73 billion to $76 billion and signaled plans to continue spending aggressively on artificial intelligence next year.“Our investments are paying off, the core business is strong, and we’re seeing velocity across the board,” Zuckerberg said in a statement.Meta said advertising impressions across its family of apps, which includes Facebook and Instagram, rose 10% from a year earlier, while the average price per ad jumped 14%.The company reported net income of $9.86 billion, or $3.83 per diluted share, compared with $2.71 billion, or $1.05 per diluted share, in the year-earlier period.But Meta’s earnings were weighed down by a nearly $10 billion charge tied to a sweeping legal settlement.Meta booked a $9.89 billion charge tied to an August agreement with 52 state attorneys general to resolve litigation related to teen mental health and social media.The agreement calls for payments of up to about $18.59 billion.The charge helped drive a 37% decline in operating income to $12.99 billion, even as sales continued to climb.Excluding the legal charge, Meta said operating profit would have reached $22.88 billion, while diluted earnings per share would have been $7.40.The company’s bottom line also benefited from a sharply lower income tax provision of $3.14 billion, down from $18.95 billion in the year-earlier qu...