Wall Street previously expected Meta to report an increase in second-quarter earnings, but the company actually reported a decline, causing its stock price to fall by nearly 10% after the report was released. Despite this, Meta's revenue increased by 28% year-over-year, with ad impressions growing by 14% and the price per ad increasing by 12%. The company's AI advertising product, Advantage+, has reached an annualized run rate of $75 billion and serves 9 million small and medium-sized business clients. Generative recommenders have driven an 8.3% increase in Facebook ad clicks and a 15.7% increase in conversion rates. Meta's current forward P/E ratio is below 18x. Bears argue that Meta's free cash flow is declining and that it is caught in a spending spiral to survive the AI race, with capital expenditures projected to exceed $200 billion by 2028.