Meta sends blended indicators as quarterly gross sales beat estimates however outlook muted

Meta CEO Mark Zuckerberg, pictured above [File]
| Picture Credit score: AP

Meta Platforms beat Wall Avenue expectations for fourth-quarter income on Wednesday however predicted gross sales within the present first quarter could not meet forecasts, sending blended indicators about how its bets on expensive synthetic intelligence-powered instruments are paying off.

The Fb and Instagram guardian firm expects first quarter income between $39.5 billion and $41.8 billion, in contrast with analysts’ common estimate of $41.72 billion, based on information compiled by LSEG.

It reported income of $48.4 billion for the fourth quarter of 2024, effectively above analysts’ estimate of $47.0 billion.

Meta shares had been flat after the market closed however rose as CEO Mark Zuckerberg spoke optimistically about Meta’s AI initiatives and the way the launch of Chinese language firm DeepSeek’s fashions, which tanked world markets this week, bolstered his conviction that open supply AI is the suitable technique.

“There’s going to be an open supply commonplace globally,” Zuckerberg stated on a convention name. “It is vital that it is an American commonplace.”

The forecast raised recent questions on Meta’s capital spending. The corporate depends on its core social media adverts enterprise to cowl the prices related to its AI ambitions and investments in “metaverse” applied sciences like good glasses and augmented actuality methods.

Final week, Zuckerberg introduced that Meta plans capital expenditure of as a lot as $65 billion in 2025 to broaden its AI infrastructure, whereas additionally growing hiring for AI roles.

On Wednesday, Meta stated it anticipated whole bills for 2025 to be within the vary of $114 billion to $119 billion, up from a complete of $95 billion in 2024.

“Meta’s gangbusters This autumn outcomes clearly reveal that advert revenues stay the corporate’s lifeblood. That stated, the most important query heading into 2025 is not about immediately’s earnings—it is about whether or not Mark Zuckerberg’s $60–65 billion AI infrastructure wager will repay,” stated Jeremy Goldman, principal analyst at eMarketer.

Household day by day lively folks (DAP), a metric Meta makes use of to trace distinctive customers who open any considered one of its apps in a day, rose about 5% from a yr earlier to three.35 billion.

Meta’s outcomes come after DeepSeek’s launch of its newest AI fashions triggered a selloff in world tech shares on Monday on issues about rising AI prices within the U.S.

DeepSeek has stated its fashions both match or outperform high U.S. rivals at a fraction of the fee, together with Meta’s personal Llama fashions, difficult the prevailing view that scaling AI requires huge computing energy and funding.

Zuckerberg stated it was too early to inform how DeepSeek’s emergence globally will influence Meta’s funding and capital expenditure technique, whereas noting that Meta’s AI groups had been already integrating the Chinese language firm’s insights into their plans.

“There are a selection of issues that they’ve advances that we’ll hope to implement into our methods,” Zuckerberg stated, addressing questions on DeepSeek.

The breakthrough may heighten scrutiny from buyers fearful about Meta’s heavy spending on AI and metaverse gadgets, although it could additionally profit the world’s largest social media firm if it efficiently brings down the price of constructing and supporting the fashions.

Meta continues to hemorrhage cash at its metaverse-oriented Actuality Labs unit, which beat gross sales expectations however nonetheless misplaced about $5 billion within the fourth quarter.

Zuckerberg informed analysts he believes the enterprise alternative for Meta in AI lies past 2025.

Meta — among the many high patrons of Nvidia’s sought-after AI chips — goals to finish the yr with over 1.3 million graphics processors (GPUs) and produce about 1 gigawatt of computing energy on-line, Zuckerberg stated on Friday in a Fb put up outlining the corporate’s 2025 spending targets.

The corporate would proceed shopping for such chips whereas additionally engaged on internally designed customized silicon, stated Meta CFO Susan Li. Meta goals to make use of its personal chips to coach its AI rating and suggestions methods – which decide what seems in customers’ feeds – by subsequent yr, she stated.

Zuckerberg stated earlier this month that Meta would lay off 5% of its “lowest performers” and warned staff about extra such job cuts this yr to lift efficiency.