Meta to report Q4 earnings as generative AI takes center stage


Fresh off of testifying before the Senate that his social media empire doesn’t hurt kids, Meta (META) CEO Mark Zuckerberg will now face shareholders as his company reports its fourth quarter earnings after the bell on Thursday.

Meta has been on a hot streak over the last 12 months, with shares rocketing 121% as of Thursday morning. In January, the company’s market capitalization once again eclipsed the $1 trillion mark. We’re only a month into 2024, but so far Meta’s stock has outperformed the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

But if Meta is going to keep up its hot streak, it’s going to need to deliver on continued ad sales growth, which should keep the spotlight off of its continued investment in the metaverse and its Reality Labs business.

For the quarter, analysts are expecting Meta to post adjusted earnings per share of $5.05 on revenue of $39.01 billion, according to Bloomberg consensus data. That would mark a significant increase from the $32.2 billion in revenue the company generated in the same quarter last year.

Anticipated advertising revenue is set to come in at $37.8 billion, up from $31.3 billion in Q4 2022. The number of Facebook daily active users is expected to top 2.07 billion, an increase from 2 billion last year. Family of apps daily active users should touch 3.11 billion, a sizable jump from the 2.96 billion the company reported in Q4 2022.

Meta’s Reality Labs, however, will continue to be a burden on the company. The division, which is tasked with turning Zuckerberg’s vision of the metaverse into a reality, is expected to report operating losses of $4.1 billion. That, however, is down from the $4.3 billion the company lost on its endeavor last year.

Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)

Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images)

The launch of Apple’s rival Vision Pro headset could create a jump in consumer interest in AR/VR headsets and generate a knock-on effect for Meta’s Quest line of headsets.

But Meta’s Reality Labs efforts have taken a backseat in investors’ minds to the company’s increased investments in generative AI. In January, Zuckerberg announced in an Instagram Reels post that the company’s long-term strategy was to develop general artificial intelligence and make it open source.

There’s no single definition of generative AI, but broadly speaking, it’s a kind of AI that can think and learn like a human. In other words, it’s capable of understanding a multitude of concepts rather than specializing in a certain field.

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In his post, Zuckerberg also said Meta is building out its AI capabilities by spending billions of dollars on Nvidia GPUs.

The company is already using generative AI features for advertisers to help them build out ads, and its Meta AI chatbot is available through its various apps.

Now the company needs to tell Wall Street whether those investments are beginning to pay off.

Daniel Howley is the tech editor at Yahoo Finance. He’s been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.

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