By Katie Paul, Akash Sriram

(Reuters) -Facebook owner Meta Platforms beat analysts’ estimates for third-quarter revenue and profit on Wednesday, but warned of “significant acceleration” in artificial intelligence-related infrastructure expenses.

The results sent mixed signals to investors about whether digital ad sales from Meta’s core social media business would continue to cover the cost of its massive AI buildout.

Shares of the Menlo Park, California-based firm were down 2.2% in after-hours trading.

Meta is firing on all cylinders and AI is clearly driving growth,” said Jesse Cohen, an analyst at Investing.com. With that being said, investors appear to be disappointed over the company’s forward guidance and rising costs needed to develop AI features.

Like its Big Tech peers, Meta has invested heavily in data centers to capitalize on the generative AI boom. Unlike providers of cloud services, however, it does not expect to earn money from those investments right away and therefore is more subject to scrutiny from investors around its spending.

The world’s biggest social media company kept costs in check in the third quarter, with total expenses of $23.2 billion and capital expenditure of $9.2 billion. It projected a slightly improved expense picture for the year as well, narrowing its total expense forecast to $96 billion to $98 billion.

In its press release, however, it warned of “a significant acceleration in infrastructure expense growth next year as we recognize higher growth in depreciation and operating expenses of our expanded infrastructure fleet.

Meta’s earnings come after encouraging results from digital ad bellwethers Alphabet and Snap, which both beat third-quarter revenue estimates on Tuesday thanks in part to rising sales of AI-assisted ads.

Meta reported third-quarter profit of $6.03 per share, compared with estimates of $5.25 per share, according to data compiled by LSEG. Third-quarter revenue stood at $40.59 billion, compared with analysts’ estimates of $40.29 billion.

The company also forecast between $45 billion and $48 billion in fourth-quarter revenue, compared with analysts’ estimates of $46.31 billion, according to data from LSEG.

Advertising accounts for the vast majority of Meta’s revenue, meaning higher marketing spending during the holiday season could provide a crucial boost to the company’s bottom line, according to analysts.

Meta’s family daily active people (DAP), a metric it uses to track unique users who open any one of its apps in a day, grew 5% in the third quarter to 3.29 billion. DAP increased 7% in the preceding June quarter, to 3.27 billion.

The company’s Reality Labs division, which produces its Quest virtual reality headsets, smart glasses made with EssilorLuxottica’s Ray-Ban and upcoming augmented-reality glasses, lost $4.4 billion in the third quarter, narrower than analyst estimates of a $4.7 billion loss.

(Reporting by Akash Sriram in Bengaluru and Katie Paul in New YorkEditing by Maju Samuel, Peter Henderson and Matthew Lewis)