Meta to report Q4 earnings as generative AI takes center stage

Contemporary off of testifying earlier than the Senate that his social media empire doesn’t harm children, Meta (META) CEO Mark Zuckerberg will now face shareholders as his firm reviews its fourth quarter earnings after the bell on Thursday.

Meta has been on a scorching streak over the past 12 months, with shares rocketing 121% as of Thursday morning. In January, the corporate’s market capitalization as soon as once more eclipsed the $1 trillion mark. We’re solely a month into 2024, however to date Meta’s inventory has outperformed the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

But when Meta goes to maintain up its scorching streak, it’s going to wish to ship on continued advert gross sales development, which ought to preserve the highlight off of its continued funding within the metaverse and its Actuality Labs enterprise.

For the quarter, analysts expect Meta to submit adjusted earnings per share of $5.05 on income of $39.01 billion, in keeping with Bloomberg consensus knowledge. That might mark a major improve from the $32.2 billion in income the corporate generated in the identical quarter final yr.

Anticipated promoting income is about to come back in at $37.8 billion, up from $31.3 billion in This fall 2022. The variety of Fb day by day energetic customers is predicted to high 2.07 billion, a rise from 2 billion final yr. Household of apps day by day energetic customers ought to contact 3.11 billion, a large soar from the two.96 billion the corporate reported in This fall 2022.

Meta’s Actuality Labs, nonetheless, will proceed to be a burden on the corporate. The division, which is tasked with turning Zuckerberg’s imaginative and prescient of the metaverse right into a actuality, is predicted to report working losses of $4.1 billion. That, nonetheless, is down from the $4.3 billion the corporate misplaced on its endeavor final yr.

The launch of Apple’s rival Imaginative and prescient Professional headset may create a soar in shopper curiosity in AR/VR headsets and generate a knock-on impact for Meta’s Quest line of headsets.

However Meta’s Actuality Labs efforts have taken a backseat in buyers’ minds to the corporate’s elevated investments in generative AI. In January, Zuckerberg introduced in an Instagram Reels submit that the corporate’s long-term technique was to develop common synthetic intelligence and make it open supply.

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There’s no single definition of generative AI, however broadly talking, it’s a sort of AI that may suppose and study like a human. In different phrases, it’s able to understanding a large number of ideas moderately than specializing in a sure area.

In his submit, Zuckerberg additionally mentioned Meta is constructing out its AI capabilities by spending billions of {dollars} on Nvidia GPUs.

The corporate is already utilizing generative AI options for advertisers to assist them construct out advertisements, and its Meta AI chatbot is out there via its numerous apps.

Now the corporate wants to inform Wall Avenue whether or not these investments are starting to repay.

Daniel Howley is the tech editor at Yahoo Finance. He is been masking the tech trade since 2011. You’ll be able to observe him on Twitter @DanielHowley.

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