Brad Erickson, RBC Internet analyst, joins CNBC's 'Squawk on the Street' to discuss expectations for Meta's earnings reporting today, the company's plans for AI super intelligence, and more.

The release of Open AI's ChatGPT has accelerated the development of artificial intelligence and warnings about its impact on society.

Rise of AI

Meta is expected to report robust earnings, with analyst Brad Erickson from RBC highlighting positive indicators throughout the quarter, including high teens revenue growth and strong operating margins. Ad demand, particularly from small and medium-sized businesses, has been healthy, with increasing prices in Meta's ad auctions.

CEO Mark Zuckerberg recently shared his vision for AI super intelligence, emphasizing Meta's focus on personal and productivity-oriented AI tools. This positions Meta in competition with other major AI players, aiming to add utility to users' daily lives. Ongoing investments in AI and capital expenditures are expected to remain a point of interest for investors.

Brad Erickson: Expect to see really good numbers in Meta's earnings

Time Meta CEO Mark Zuckerberg just posting on Instagram. He laid out his vision for AI super intelligence. Said some interesting things about the future. Let's bring in RBC's tech analyst Brad Erickson. He does cover Meta and Amazon. I guess first let's just get to the Meta print this evening and what your expectations are in terms of what we may see there. Yeah I think you're going to see really good numbers. Our checks were generally positive through the quarter. So we're talking like high teens growth probably something in the 16 17 18 percent range. And then guidance probably the high end right around where the street is estimating for Q3 maybe even a little bit above good operating margins. CapEx always the question we'll see. You know our view there is that to the degree that they can continue to outperform on the revenue front they'd probably have room to move CapEx up. Google did it last week. We'll see what they say tonight. Yeah obviously those Google numbers as well I would think paint a good potentially good picture for Meta. Yeah absolutely. Search different than social obviously kind of intent based buying versus impulse. But yeah nonetheless I think small and medium sized businesses which is primarily who drive these businesses and primarily who we talk to in doing our channel work. Things were things were generally good. Prices were going up in the auction which is a good sign from a demand perspective for ads. So yeah I think I think all signs point to good stuff for tonight there. I want I wanted to get your reaction to this Instagram post I just mentioned from Zuckerberg the video just just coming out because it may get to this question about CapEx. You know he said AI keeps accelerating. In fact over the past few months we've begun to see glimpses of AI systems improving themselves. And so he goes on to say Brad developing super intelligence is now in sight. And then you know he thinks it's going to have a more meaningful impact on our lives going to come from everyone having personal super intelligence that helps you achieve your goals. He talks about things like having the glasses to help you basically interpret the entire world. I don't know your take on it whether it means that we may get something unexpected this evening as well. I like your take. I don't know. Yeah. The most interesting thing to me that stuck out was he kind of had this kind of altruistically positioning meta as being really about people and productivity and person personal nature of AI. And that kind of drew a little stone in terms of the competitors by saying hey a lot of these other things are based at enterprise workforce productivity. And you know we're seeing growing evidence of jobs being impacted potentially by AI. It's kind of a theory at this point where it's hard to directly attribute it. But I thought it was interesting positioning meta as more sort of you know tools for the people for for your personal life. It's very interesting. I mean he's clearly trying to position meta as the leader when it comes to super intelligence and AI in general. We've seen the competition for talent with open AI. Who else is he. Is he competing with. And is it a world where it's winner take all. Yeah I think all of the all of the model companies. Right. So that's everyone from certainly from Google to Anthropic to to open AI to perplexity and a number of others. I think those are kind of the primary competitors where you're just trying to add utility in people's lives. Right. Like set aside whether it's for work or personal or whatever you're trying to add utility to people's lives effectively take up more of people's lives. Right. If you're involved engaged in some more ads you can drive more revenue by adding more value in people's lives. So I think that's how he thinks about the competitive landscape. Brad appreciate it. We'll keep an eye obviously for the numbers this evening. Thank you. Thanks.

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Brad Erickson: Expect to see really good numbers in Meta's earnings

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