On January 29, Meta Platforms exceeded Wall Street's expectations for fourth-quarter revenue but expressed uncertainty about meeting forecasted sales in the current first quarter, creating mixed signals regarding the success of its investments in costly artificial intelligence-powered tools.
The company, which owns Facebook and Instagram, anticipates first-quarter revenue to range between $39.5 billion and $41.8 billion, below analysts' average projection of $41.72 billion. For the fourth quarter of 2024, it reported revenue of $48.4 billion, surpassing analysts' estimate of $47.0 billion.
Meta's CEO, Mark Zuckerberg, remained positive about the company's AI initiatives during a conference call, emphasizing the importance of an American open-source AI standard and citing the recent launch of Chinese company DeepSeek's models as reinforcing his belief in this strategy.
Regarding Meta's financial outlook, the company revealed plans for significant capital expenditures in 2025 to support its AI ambitions and investments in "metaverse" technologies like smart glasses and augmented reality systems. Meta projected total expenses for 2025 to range from $114 billion to $119 billion, up from $95 billion in 2024.
Jeremy Goldman, principal analyst at eMarketer, noted, Meta's gangbusters Q4 results clearly demonstrate that ad revenues remain the company's lifeblood. He highlighted the uncertainty surrounding Zuckerberg's sizable AI infrastructure investment and its potential impact.
Meta's daily active people (DAP) metric, measuring unique users across its apps in a day, increased by approximately 5% year-over-year to 3.35 billion.
The company faces scrutiny over its substantial spending in AI and metaverse devices, with particular focus on the impact of DeepSeek's AI models globally. Zuckerberg mentioned Meta's intent to leverage DeepSeek's insights in their AI strategies but emphasized that the long-term implications were uncertain.
Furthermore, Meta aims to enhance its AI capabilities by acquiring over 1.3 million GPUs and 1 gigawatt of computing power this year. CFO Susan Li disclosed plans to transition to internally designed custom silicon to train the company's AI systems, such as ranking and recommendations, by the following year.
In a recent announcement, Zuckerberg indicated Meta's intention to reduce its workforce by 5% to improve company performance.