Meta posts big profit, aims to take AI lead
Social media giant Meta reported surging profits and revenue for 2024, with ambitious plans to expand its artificial intelligence infrastructure in the year ahead. The bullish projection about the company's AI future sent shares in the company spiking by as much as five percent in after hours trading, though this later steadied to two percent.
CEO Mark Zuckerberg expressed confidence in Meta's AI capabilities, foreseeing the company becoming a world leader in the technology. He acknowledged that delivering on the necessary investments would require time.
Financial Performance
The parent company of Facebook, Instagram, and WhatsApp saw its net income soar 59 percent to $62.36 billion for the full year, while fourth-quarter profits jumped 49 percent to $20.84 billion. Revenue reached $164.5 billion, up 22 percent from 2023, driven by stronger advertising performance as ad prices rose 10 percent and impressions increased 11 percent across its platforms.
Content Policies and Strategies
Meta made significant shifts in its content policies aimed at aligning with US President Donald Trump's preferences. The company announced the conclusion of its US fact-checking program designed to combat misinformation. This decision followed criticism from conservative voices who perceived such efforts as censorship.
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Zuckerberg highlighted the upcoming year as crucial for redefining Meta's relationship with governments. He emphasized the company's alignment with American values and interests, particularly in the technology sector.
User Growth and Future Plans
Meta's user base continued to expand, reaching 3.35 billion daily active users across its platforms in December 2024, a 5 percent increase year-over-year. Looking ahead, Meta plans substantial infrastructure investments, with expected capital expenditures of $60-65 billion in 2025, primarily supporting AI initiatives.
Challenges and Competition
Despite strong stock performance, Meta faces regulatory challenges and emerging competition. The emergence of Chinese startup DeepSeek's cost-effective AI model has prompted Meta to establish war rooms to explore and potentially integrate these innovations into its own AI models.
The company projects first-quarter 2025 revenue between $39.5-41.8 billion, indicating growth of 8-15 percent year-over-year. This forecast suggests that Meta's recent content moderation changes might impact revenue in the upcoming quarter.
Overall, Meta's focus on AI innovation and strategic growth initiatives positions the company to maintain its leadership in the ever-evolving tech landscape.
