Shares of Meta dipped more than 2% Thursday, a day after the company released strong third-quarter results but offered cautious comments about potential ad softness due to the ongoing Israel-Hamas war.
Meta reported $34.15 billion in revenue for the quarter, up 23%, and the fastest rate of growth since 2021. The company’s net income jumped 164% to $11.58 billion, or $4.39 a share. Both revenue and earnings surpassed Wall Street’s expectations, marking a welcome change for investors after the company’s core digital ads business dropped for three straight quarters in 2022.
Shares of Meta initially rose after the report but the gains were erased when Meta’s finance chief Susan Li warned analysts about unpredictability in the Middle East. As a result of the conflict in Israel, Meta gave fourth-quarter guidance between $36.5 billion to $40 billion. The range is wider than the $2.5 billion gap the company typically offers.
“We have observed softer ads in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook,” Li said during the call with analysts.
Meta Platforms CEO Mark Zuckerberg speaks about the Facebook News feature at the Paley Center For Media in New York on Oct. 25, 2019.
Drew Angerer | Getty Images News | Getty Images
But despite the uncertainty around the war, many analysts remain optimistic about Meta’s performance.
Evercore analysts said “the BIG negative” from the call was that brand advertising demand has slowed as a result of the war. They note that Snap offered similar commentary in its recent earnings call, and said it is not unlike the advertising pause that took place after war broke out in Ukraine.
“We believe ad demand has already begun to recover at Meta,” they said in a note Wednesday, adding that they “believe near-term ad market demand will be more volatile than usual.”
Despite the slowing brand advertising demand, the Evercore analysts said a lot is “working” at Meta. They said AI is driving engagement, and the company’s “year of efficiency” mantra is extending into years of efficiency.
Analysts at Morgan Stanley said, while Meta has seen some pause in branded advertising, they believe the company has been less impacted than others. They said Meta’s AI investments and its increasing engagement on Reels remind them of when the company was first growing its Facebook and Instagram platforms.
“While all advertising may be impacted by geopolitical activity, advertising allocation remains a relative game and we believe META’s differentiation gap is widening vs most peers,” the analysts wrote in a Thursday note.
Analysts at Deutsche Bank said they think the fundamentals of Meta’s business “remain best-in-class,” and can withstand the impact of the conflict. They added that Meta’s pipeline is “rich with products” like its X competitor Threads and other AI tools that could contribute to engagement and revenue.
“As such, we have growing conviction in the thesis of durable top-line growth at Meta despite near term volatility related to geopolitical uncertainty,” they wrote in a Thursday note.
The Rebel-Quad is the second-generation product from Rebellions and is made up of four Rebel AI chips. Rebellions, a South Korean firm, is looking to rival companies like Nvidia in AI chips.
Rebellions
South Korean artificial intelligence chip startup Rebellions has raised money from tech giant Samsung and is targeting a funding round of up to $200 million ahead of a public listing, the company’s management told CNBC on Tuesday.
Last year, Rebellions merged with another startup in South Korea called Sapeon, creating a firm that is being positioned as one of the country’s promising rivals to Nvidia.
Rebellions is currently raising money and is targeting funding of between $150 million and $200 million, Sungkyue Shin, chief financial officer of the startup, told CNBC on Tuesday.
Samsung’s investment in Rebellions last week was part of that, Shin said, though he declined to say how much the tech giant poured in.
Since its founding in 2020, Rebellions has raised $220 million, Shin added.
The current funding round is ongoing and Shin said Rebellions is talking to its current investors as well as investors in Korea and globally to participate in the capital raise. Rebellions has some big investors, including South Korean chip giant SK Hynix, telecommunication firms SK Telecom and Korea Telecom, and Saudi Arabian oil giant Aramco.
Rebellions was last valued at $1 billion. Shin said the current round of funding would push the valuation over $1 billion but declined to give specific figure.
Rebellions is aiming for an initial public offering once this funding round has closed.
“Our master plan is going public,” Shin said.
Rebellions designs chips that are focused on AI inferencing rather than training. Inferencing is when a pre-trained AI model interprets live data to come up with a result, much like the answers that are produced by popular chatbots.
With the backing of major South Korean firms and investors, Rebellions is hoping to make a global play where it will look to challenge Nvidia and AMD as well as a slew of other startups in the inferencing space.
That could turn out to be a strategic win for Samsung, which is a very distant second to TSMC in terms of market share in the foundry business. Samsung has been looking to boost its chipmaking division. Samsung Electronics recently entered into a $16.5 billion contract for supplying semiconductors to Tesla.
If Rebellions manages to find a large customer base, this could give Samsung a major customer for its foundry business.
Data storage tapes are stored at the National Energy Research Scientific Computing Center (NERSC) facility at the Lawrence Berkeley National Laboratory, which will house the U.S. supercomputer to be powered by Nvidia’s forthcoming Vera Rubin chips, in Berkeley, California, U.S. May 29, 2025.
Manuel Orbegozo | Reuters
Europe is setting its sights on gigawatt factories in a bid to bolster its lagging artificial intelligence industry and meet the challenges of a rapidly-changing sector.
Buzz around the concept of factories that industrialize manufacturing AI has gained ground in recent months, particularly as Nvidia CEO Jensen Huang stressed the importance of the infrastructure at a June event. Huang hailed a new “industrial revolution” at the GTC conference in Paris, France, and said his firm was working to help countries build revenue-generating AI factories through partnerships in France, Italy and the U.K.
For its part, the European Union describes the factories as a “dynamic ecosystem” that brings together computing power, data and talent to create AI models and applications.
The bloc has long been a laggard behind the U.S. and China in the race to scale up artificial intelligence. With 27 members in the union, the region is slower to act when it comes to agreeing new legislation. Higher energy costs, permitting delays and a grid in dire need of modernization can also hamper developments.
Henna Virkkunen, the European Commission’s executive vice president for tech sovereignty, told CNBC that the bloc’s goal is to bring together high quality data sets, computing capacity and researchers, all in one place.
“We have, for example, 30% more researchers per capita than the U.S. has, focused on AI. Also we have around 7,000 startups [that] are developing AI, but the main obstacle for them is that they have very limited computing capacity. And that’s why we decided that, together with our member states, we are investing in this very crucial infrastructure,” she said.
These are very big investments because they are four times more powerful when it comes to computing capacities than the biggest AI factories.
Henna Virkkunen
European Commission’s executive vice president for tech sovereignty
“We have everything what is needed to be competitive in this sector, but at the same time we want to build up our technological sovereignty and our competitiveness.”
So far, the EU has put up 10 billion euros ($11.8 billion) in funding to set up 13 AI factories and 20 billion euros as a starting point for investment in the gigafactories, marking what it says is the “largest public investment in AI in the world.” The bloc has already received 76 expressions of interest in the gigafactories from 16 member states across 60 sites, Virkkunen said.
The call for interest in gigafactories was “overwhelming,” going far beyond the bloc’s expectations, Virkkunen noted. However, in order for the factories to make a noteworthy addition to Europe’s computing capacity, significantly more investment will be required from the private sector to fund the expensive infrastructure.
Telecommunications firm Telenor is already exploring possible use cases for such facilities with the launch of its AI factory in Norway in November last year. The company currently has a small cluster of GPUs up and running, as it looks to test the market before scaling up.
Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen and EVP Infrastructure Jannicke Hilland in front of a Nvidia rack at the firm’s AI factory
Telenor
“The journey started with a belief — Nvidia had a belief that every country needs to produce its own intelligence,” Telenor’s Chief Innovation Officer and Head of the AI Factory Kaaren Hilsen told CNBC.
Hilsen stressed that data sovereignty is key. “If you want to use AI to innovate and to make business more efficient, then you’re potentially putting business critical and business sensitive information into these AI models,” she said.
The company is working with BabelSpeak, which Hilsen described as a Norwegian version of ChatGPT. The technology translates sensitive dialogues, such as its pilot with the border police who can’t use public translation services because of security issues.
We’re experiencing an “intelligence revolution” whereby “sovereign AI factories can really help advance society,” Hilsen said.
“One could argue that it’s relatively easy, provided you have the money. It’s relatively easy to buy the chips from Nvidia and to create these hardware factories, but to make it run and to make it economically viable is a completely different question,” Martens told CNBC.
He said that the EU will likely have to start at a smaller scale, as the region is unable to immediately build its own frontier models in AI because of their expense.
“I think in time, Europe can gradually build up its infrastructure and its business models around AI to reach that stage, but that will not happen immediately,” Martens said.
Workers assemble smartphones at Dixon Technologies’ Padget Electronics Pvt factory in Uttar Pradesh, India, on Jan. 28, 2021.
Bloomberg | Bloomberg | Getty Images
India has overtaken China to become the top exporter of smartphones to the U.S., according to research firm Canalys,reflectingthe shift in manufacturing supply chain away from Beijing amid tariff-fueled uncertainty.
Smartphones assembled in India accounted for 44% of U.S. imports of those devices in the second quarter, a significant increase from just 13% in the same period last year. Total volume of smartphones made in India soared 240% from a year earlier, Canalys said.
In contrast, the share of Chinese smartphone exports to the U.S. shrank to 25% in the quarter ended June, from 61% a year earlier, Canalys data released Monday showed. Vietnam’s share of smartphone exports to the U.S. was also higher than that of China at 30%.
The surge in shipments from India was primarily driven by Apple‘s accelerated shift toward the country at a time of heightened trade uncertainty between the U.S. and China, said Sanyam Chaurasia, principal analyst at Canalys. This is the first time India exported more smartphones to the U.S. than China.
Trump has threatened Apple with additional tariffs and urged the company’s CEO Tim Cook to make iPhones domestically, a move experts have said would be nearly impossible as it would push iPhone prices higher.
While many of Apple’s core products, including iPhones and Mac laptops, have received exemptions from Trump’s “reciprocal tariffs,” officials have warned that it could be a temporary reprieve.
Its global peers, Samsung Electronic and Motorola, have also been striving to move assembly for U.S.-bound smartphones to India, though their shift has been significantly slower and is limited in scale compared with Apple, according to Canalys.
Shares of Apple have tumbled 14% this year, partly on concerns over its high exposure to tariff uncertainty and intensifying competition in smartphones and artificial intelligence sector.
While the company has begun assembling iPhone 16 Pro models in India, it still relies heavily on China’s more mature manufacturing infrastructure to meet U.S. demand for the premium model, Canalys said.
In April, Trump imposed a 26% tariff on imports from India, much lower than the triple-digit tariffs on China at the time, before pausing those duties until an Aug 1. deadline.