Meta CEO Mark Zuckerberg appears on the Meta Connect event in Menlo Park, California, on Sept. 25, 2024.
David Paul Morris | Bloomberg | Getty Images
Meta is slated to report fourth-quarter earnings on Wednesday after the close of normal trading.
Here’s what analysts polled by LSEG predict:
- Earnings per share: $6.77
- Revenue: $47.03 billion
Meta shares are up about 14% since Oct. 30, when the social networking giant reported third-quarter earnings and said it will raise the low end of its 2024 capital expenditures guidance from $37 billion to $38 billion. On the time, the corporate’s shares dipped barely in after-hours trading, indicating some investor trepidation that Meta could possibly be spending an excessive amount of on artificial intelligence-related computing infrastructure without seeing many near-term returns.
CEO Mark Zuckerberg on Friday said Meta would invest between $60 billion and $65 billion in capital expenditures in 2025 as a part of its AI strategy. Afterward, Meta shares hit a record, indicating that investors appear more tolerant of the corporate’s heavy spending so long as it is expounded to AI and never the still-nascent metaverse.
“They have been really adamant that there is rather a lot to be enthusiastic about,” Raymond James managing director Josh Beck said about Meta’s AI spending. “They don’t seem to be going to be left behind the cycle.”
The high costs related to AI have grow to be more prescient after last week’s emergence of DeepSeek, a Chinese lab that claimed to have created a big language model that performs higher and costs less to coach than its American counterparts.Â
DeepSeek’s unverified claims won’t have a right away effect on Meta’s AI spend, said Ralph Schackart, an analyst at investment bank William Blair.Â
“There’s an excessive amount of to realize or lose by not investing,” Schackart said.
Wall Street expects Meta to report fourth-quarter capital expenditures of $15.33 billion.
Investors wish to know the way TikTok’s removal from the Apple and Google app stores within the U.S. has affected Meta. The corporate has offered deals to creators to advertise Instagram on other short-form video apps, including TikTok, Snapchat and YouTube, CNBC reported this week.Â
Meta last week said its Threads microblogging platform would begin testing ads within the U.S. and Japan. The ads show Meta is attempting to capitalize on TikTok’s “volatility” within the eyes of brands looking for alternatives, Jasmine Enberg, principal analyst with eMarketer, said in an email.
The corporate’s rest of its content moderation policies, nonetheless, might concern advertisers, Enberg said.
“It can have been smarter to attend for a less politically charged social media environment,” Enberg said.
