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Meta will report earnings for the fourth quarter of 2024 after US stock markets close on Wednesday.
Analysts will likely ask about Mark Zuckerberg’s plans to spend between $60bn and $65bn on AI infrastructure in 2025. That is up from the $50bn the CEO said he expected to spend at the end of last quarter. But as Meta faces increased competition, especially from new player DeepSeek AI, the company is ramping up its AI efforts.
Earlier this week, Meta announced it was rolling out a more personalized AI assistant. The tech giant also maintains that Meta AI is the most used virtual assistant, though it is difficult to avoid using it on platforms such as Instagram and WhatsApp by design.
Some analysts remain bullish about Meta’s AI capabilities despite the overnight success of Chinese competitor DeepSeek.
“DeepSeek is a great LLM model that is competitive with Meta’s Llama and OpenAI’s ChatGPT ... the comparisons end there, as tonight we expect a doubling down on the AI vision/build-out from both tech stalwarts Meta and MSFT which will be another strong sign of confidence this AI Revolution is just starting,” said Dan Ives of Wedbush Securities. Microsoft reported its quarterly earnings the same day as Meta.
Other analysts expect AI will take a back seat to concerns over Zuckerberg’s decision to get rid of third-party fact-checking programs.
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“Expect a more defensive tone during Meta’s Q4 earnings call, especially during the Q&A as questions abound about the company shuttering its third-party fact-checkers,” said Forrester VP research director Mike Proulx. “Meta’s typical AI progress update will get overshadowed by analyst concerns about advertiser brand safety and user backlash.”
Days after Meta announced it was doing away with its third-party fact-checker program, news broke that the company would reduce its workforce by 5% – this time targeting what it called “low performers”.
“Despite a rather frenzied start to 2025, Meta’s Q4, 2024 results will likely demonstrate continued company momentum heading into this year,” Proulx said. “With yet another 5% reduction in workforce announced, Meta’s 2024 ‘year of efficiency’ gets trumped in 2025 with an apparent year of ‘intensity’.”
Zuckerberg is also expected to be asked about a leaked internal memo that indicated the company’s Reality Labs division had beat all of its sales and user targets and grew 40% in 2024. The Reality Labs team is responsible for the Quest headsets and the Horizon software platform that powers the smart Ray-Ban glasses.
There’s also been a reported leadership shake-up. Reality Labs will be brought closer to the main business and be led by Meta COO Javier Olivan, according to the Information. It is unclear if Reality Labs’ current COO Dan Reed will remain at the company.
