Meta to report fourth-quarter earnings amid DeepSeek mania and ballooning AI investments

Meta will report earnings for the fourth quarter of 2024 after US inventory markets shut on Wednesday.

Analysts will probably ask about Mark Zuckerberg’s plans to spend between $60bn and $65bn on AI infrastructure in 2025. That’s up from the $50bn the CEO stated he anticipated to spend on the finish of final quarter. However as Meta faces elevated competitors, particularly from new participant DeepSeek AI, the corporate is ramping up its AI efforts.

Earlier this week, Meta introduced it was rolling out a extra personalised AI assistant. The tech large additionally maintains that Meta AI is probably the most used digital assistant, although it’s troublesome to keep away from utilizing it on platforms equivalent to Instagram and WhatsApp by design.

Some analysts stay bullish about Meta’s AI capabilities regardless of the in a single day success of Chinese language competitor DeepSeek.

“DeepSeek is a good LLM mannequin that’s aggressive with Meta’s Llama and OpenAI’s ChatGPT … the comparisons finish there, as tonight we anticipate a doubling down on the AI imaginative and prescient/build-out from each tech stalwarts Meta and MSFT which can be one other robust signal of confidence this AI Revolution is simply beginning,” stated Dan Ives of Wedbush Securities. Microsoft reported its quarterly earnings the identical day as Meta.

Different analysts anticipate AI will take a again seat to issues over Zuckerberg’s choice to do away with third-party fact-checking applications.

“Count on a extra defensive tone throughout Meta’s This autumn earnings name, particularly in the course of the Q&A as questions abound concerning the firm shuttering its third-party fact-checkers,” stated Forrester VP analysis director Mike Proulx. “Meta’s typical AI progress replace will get overshadowed by analyst issues about advertiser model security and consumer backlash.”

Days after Meta introduced it was taking out its third-party fact-checker program, information broke that the corporate would scale back its workforce by 5% – this time focusing on what it known as “low performers”.

“Regardless of a slightly frenzied begin to 2025, Meta’s This autumn, 2024 outcomes will probably display continued firm momentum heading into this 12 months,” Proulx stated. “With yet one more 5% discount in workforce introduced, Meta’s 2024 ‘12 months of effectivity’ will get trumped in 2025 with an obvious 12 months of ‘depth’.”

Zuckerberg can be anticipated to be requested a couple of leaked inside memo that indicated the corporate’s Actuality Labs division had beat all of its gross sales and consumer targets and grew 40% in 2024. The Actuality Labs group is liable for the Quest headsets and the Horizon software program platform that powers the good Ray-Ban glasses.

There’s additionally been a reported management shake-up. Actuality Labs can be introduced nearer to the primary enterprise and be led by Meta COO Javier Olivan, in response to the Data. It’s unclear if Actuality Labs’ present COO Dan Reed will stay on the firm.