Meta Stock Jumps as Earnings Soar 50%

Here are the highlights.

Meta’s core or advertising business is firing on all cylinders, up 21% year-over-year (YoY) to $48.4 billion (B) in Q4’2024.

Its augmented reality business, called Reality Labs, also beat expectations, posting its best quarterly result of $1.1 billion.

source: META IR

Meta’s ad business has certainly taken off, and it might surpass $50B in quarterly turnover later this year if sales continue to defy Wall Street expectations.

Earnings per share were up annually by 50% to $8.02, compared to Wall Street's consensus estimate of $6.76, a massive beat.

The company’s War Chest swelled to $77.8 billion, possibly opening the door for some M&A activity later this year.

Meta continues to burn billions on their virtual reality bet called Reality Labs, this quarter’s operating loss reached a record of $5B

source: META IR

It is a worry for some investors as to when they will see the return on from those huge capital expenditure on investment.

AI Wars

Some market participants believe DeepSeek’s cost-efficiency models could mean the social media company may be able to create powerful AI systems for less money.

For 2025, the Facebook parent plans to spend $60 billion to $65 billion in capital expenditures, up roughly 60% from last year, as the AI infrastructure war intensifies.

Zuckerberg said Meta is still digesting some of DeepSeek’s feats and his team hopes to eventually implement some of those advancements for their own AI projects.

“There’s going to be an open-source standard globally. It’s important that it’s an American standard, so we take that seriously,” he said

Meta’s daily users or Daily Active People (DAP) reached 3.35 billion, that’s over 60% of the world's population that has access to the internet.

For this quarter the company guided upper range revenues of $41.8B or 15% YoY, close to Wall Street’s standards of $41.7B.

Shares are up nearly 20% this year, while the heavy tech Nasdaq is just 3%.

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