Market Bets on AI + Advertising — Meta Shares Rebound 40% from April Lows as WhatsApp Enters the Age of Advertising

TradingKey - As open-source, cheaper, and more efficient AI technologies continue to challenge the justification for massive AI capital expenditures, Meta, the parent company of Facebook, has carved out a viable path for AI commercialization through its "AI + advertising" strategy — and investors are clearly buying in. Meta’s stock has rebounded nearly 40% from its April lows.

On June 16, Meta shares rose 2.90% to $702.12, leading gains among the U.S. Magnificent Seven. Year-to-date in 2025, Meta's stock has gained 19.92%, rising about 40% from its April lows.

Meta announced that WhatsApp will begin displaying advertisements, which will appear in the “Updates” section — a design choice aimed at minimizing disruption to private messaging experiences. This marks a complete departure from WhatsApp’s long-standing “no ads” promise, opening up a new revenue stream for Meta.

WhatsApp executives stated that this strategic shift responds to long-standing business demand for ad placements within the platform, while still respecting user privacy.

Currently, WhatsApp boasts 3 billion monthly active users, including 200 million business accounts, with 1.5 billion daily users visiting the Updates page.

As the market begins to question the AI monetization prospects of major tech giants, Meta continues to double down on AI investments, particularly in AI-driven advertising. When reporting its Q1 2025 earnings, Meta raised its full-year capital expenditure guidance to $72 billion, with CEO Mark Zuckerberg firmly committed to investing heavily in artificial intelligence.

A fund industry professional noted that such spending may raise some concerns, but there is confidence that Meta can leverage AI to drive revenue growth and accelerate performance.

Jensen Investment Management’s portfolio manager believes that using AI to optimize user data for revenue generation is one of the most promising AI applications — putting Meta on offense, while Google finds itself increasingly on defense, as its search market share could be eroded by AI services like ChatGPT.

Analysts project that generative AI creative tools could boost Meta’s annual advertising revenue growth by 1–2 percentage points over the next few years, with the potential to reach a 4 percentage-point increase by 2030.