Zuckerberg’s AI dividend is paying out big time

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• How long till payoff?
• The AI flywheel
• Monster earnings still to come…

If that’s enough to get the AI paying it back, read on…

AI Collision 💥

How long do you think it takes for a multi-billion-dollar AI bet to pay off?

Well, the answer is about 18 months.

That’s the rough earnings lag Mark Zuckerberg has been operating on. And that delay is now starting to show.

Meta Platforms announced their Q2 2025 results last week, and once again, they crushed it. Revenue soared 22% year-on-year to $47.5 billion, operating income jumped 38% to $20.4 billion, and diluted earnings per share (EPS) blew past expectations to $7.14 up 38% from Q2 last year.

This is another in a long line of quarters Meta has outperformed “expectations” by a mile. And if you’re wondering why… well, you’re looking at the delayed gratification of a spending spree that began back in early 2023.

The market used to hate Meta’s AI spending sprees. The question was, “will the AI investment EVER pay off?”

Now the market can’t get enough of it. And yes, it pays off and will keep paying off for years to come.

Back in 2023 and 2024, Meta was torched by investors and analysts for its heavy capex spending on AI infrastructure. Billions poured into data centres, chips, and infrastructure.

More recently, and controversially, the sly eye has been cast at Zuckerberg for spending up big on AI talent, including mind-melting offers for individuals up to $1 billion in total compensation packages for top-tier researchers over 3–4 years.

Boy, I should have studied advanced mathematics and machine learning…

What does Zuckerberg know about Superintelligence (which is what they’re working on) that the rest of the world doesn’t?

Meanwhile, Meta’s entire advertising set up is being reworked for their lofty all-in-one AI goals. Also, Reels is pumping for Meta, conversions up 4% thanks to AI-driven targeting improvements. Threads is gaining traction albeit a long-term prospect, WhatsApp’s business layer is expanding, and their Llama 4 models are being embedded into all their products to improve efficiencies, personalisation and ultimately revenues and earnings per share.

And if 38% year on year EPS was tidy, just wait until that EPS number breaks $10 within the next handful of quarters.

That AI dividend Zuckerberg was investing in a couple of years back is really starting to payout

But here’s the thing most investors are missing…

These results now are from investments made 12–18 months ago.

And Zuckerberg hasn’t slowed down. In fact, he’s just getting started.

In recent months, Meta has stepped up its AI arms race, launching its own superintelligence lab with a mandate to reach artificial general intelligence (AGI). That’s the lab where they’re dangling those billion-dollar offers to poach researchers from OpenAI, Anthropic, Google DeepMind and Thinking Labs.

If those hires land (who would turn down $1 billion? Ok, some actually have, but not many) keep an eye on what Meta dishes up over the next eight to twelve quarters.

I think Meta is on track to deliver monster earnings growth every quarter for the next two to three years because it’s spending up big now, laying the groundwork for that future growth.

It’s an AI flywheel and Zuckerberg has it spinning full speed…

• AI improves ad targeting, better ROI for advertisers, more ad spend,
• AI drives platform engagement, longer sessions, more data,
• AI unlocks product extensions, WhatsApp payments, business tools, AI agents,
• AI talent builds new models → model moat deepens, better AI improves all other aspects of the AI rollout across their products.

It does look like the market finally gets it. That’s why Meta shares popped more than 13% after the announcement and are now a scratch under $2 trillion market cap.

But if you think Meta is done, think again.

If you assume the next wave of AI talent, infrastructure, and products takes another 18 months to mature… then Meta’s real earnings surge will likely last through 2026 and possibly longer.

Eight to twelve quarters more of continuous earnings beats would be quite the ride to see play out.

It’s not just Meta that’s feasting on the AI dividend after heavy AI investment. Microsoft, Alphabet, Amazon, and Nvidia area all still ripping earnings “expectations” quarter on quarter.

• Microsoft: Importantly their AI enabled Azure offerings were up 34% year on year over $75 billion. Azure AI services are now embedded across Microsoft 365 and GitHub Copilot and commercial Office 365 revenue is riding the AI wave. That all helped EPS jump to $3.65, well over the $3.37 expected.
• Alphabet: Revenue up 14% to $80.5 billion, with cloud growing 26% and a resurgence in ad revenue. Google is riding the Gemini upgrade cycle and hinted that AI-generated search results are being monetised at better-than-expected rates.
• Amazon: Sales jumped 13% to $167.7 billion, net income hit $18.2 billion and EPS was at $1.68 vs. $1.26 from the same time last year. AWS showed 17.5% growth and their rollout of AI they expect to, “change every customer experience…”

The story here is clear, AI spending is massive, and it pays off down the track. So, when you see they’re all still spending up big, and the markets ask, will there be a return on this capital…

I think the resounding answer is YES. You’ve just got to wait for it.

I’ve said before that Meta could end up as the best AI play of all the Mag 7 companies, and while they’re all betting big on AI, it does seem that Meta is certainly racing the hardest.

If they can continue to deliver the massive jumps in value and keep extracting that AI dividend then watch the company fly over the next few years.

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Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• Palantir (NASDAQ:PLTR) up 13%
• Meta (NASDAQ:META) up 11%
• Xpeng (NYSE:XPEV) up 8%

Bust 📉

• Vertiv (NYSE:VRT) down 3%
• Amazon (NASDAQ:AMZN) down 3%
• Dell Technologies (NYSE:DELL) down 4%

From the hive mind 🧠

• Just when you thought the far too agreeable AI companion from Elon Musk’s Grok wasn’t enough, the image and video creation tool that Grok can deliver now has a “spicy mode”.
• Well, this is probably a massive dose of fearmongering, but there’s some credence to the idea that AI could be bad for mental health. But then again so could TV, or video games, or the newspaper, or anything really.
• What’s weird about Rod Stewart playing AI generated videos of Ozzy Osborne in heaven with other dead music icons?

Artificial Polltelligence 🗳️

Weirdest AI image of the day

ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision