By Omor Ibne Ehsan
Publication Date: 2026-05-27 18:45:00
During Nvidia’s (NASDAQ:NVDA | NVDA Price Prediction) earnings call a quarter ago, the management revealed something that even Meta (NASDAQ:META) did not. Nvidia’s CFO said, “For example, at Meta, advancements in their GEM model drove a 3.5x increase in ad clicks on Facebook and more than a 1% gain in conversions on Instagram…”
This explains a lot about what is happening in the background and what kind of impact AI is having on these businesses. The strength in Meta’s advertising business in the past few years isn’t just because advertisers are seeing booming demand.
During Meta’s earnings call, the company’s management talked about “AI-driven” improvements in ad performance. The “GEM model” is likely what they are talking about.
Is AI driving ROI after all?
Investors have been worried about AI’s return on investment. Will the hundreds of billions being spent on AI amount to significant cash flow figures for these hyperscalers once the buildout is done? No one knows just yet, but we can look into Meta’s advertising business to see if it has grown considerably.
We can look at the Family of Apps segment for that. If you strip away the metaverse story and the AI rhetoric, Meta is basically an ad machine.
Global advertising revenue was at $113.6 billion for all of 2022. It was already growing significantly, as 2019 ad revenue came in at $69.5 billion. In 2025, Meta reported $196.17 billion in advertising revenue. The forecast…
