Social media giant Meta posts big profit, aims to take AI lead - The Edition
Social media giant Meta reported surging profits and revenue for 2024, along 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 Meta spiking by as much as five percent in after-hours trading, later steadying to two percent.
Financial Performance
CEO Mark Zuckerberg expressed his confidence in Meta's AI capabilities, foreseeing it as a world leader in technology. Meta, the parent company of Facebook, Instagram, and WhatsApp, saw its net income rise by 59 percent to $62.36 billion for the full year, with fourth-quarter profits increasing by 49 percent to $20.84 billion. Revenue reached $164.5 billion, a 22 percent increase from the previous year, driven by stronger advertising performance as ad prices rose by 10 percent and impressions increased by 11 percent across its platforms.
Policy Changes and User Growth
Meta's solid performance coincided with significant shifts in its content policies, including the cessation of the US fact-checking program aimed at combatting misinformation. Zuckerberg mentioned that 2025 would be crucial for redefining the company's relationship with governments, emphasizing the support Meta receives from the current US administration.
Despite changes in content moderation rules, Meta's user base continued to grow, reaching 3.35 billion daily active users across its platforms in December 2024, a 5 percent increase year-over-year.
Infrastructure Investments and Future Plans
Looking ahead, Meta plans substantial infrastructure investments, with expected capital expenditures of $60-65 billion for 2025, primarily to support AI initiatives. Total expenses are projected to reach $114-119 billion. Zuckerberg emphasized Meta's focus on developing a highly intelligent and personalized AI assistant that could reach over 1 billion people.
Meta's Reality Labs unit, focusing on virtual reality, showcased a lower-than-expected operating loss of $4.97 billion and generated $1.1 billion in sales during the fourth quarter. The company also plans to strengthen its workforce by hiring new talent.
Challenges and Competition
Despite its strong performance, Meta faces regulatory challenges and emerging competition, notably from Chinese startup DeepSeek. The company aims to adapt innovative AI models to maintain its competitive edge.
Revenue Outlook
Meta projects first-quarter 2025 revenue between $39.5-41.8 billion, indicating growth of 8-15 percent year-over-year. Analysts suggest that recent content moderation changes may impact revenue in the upcoming quarter.
Overall, Meta's financial success in 2024 and strategic investments in AI position the company for significant growth and leadership in the tech industry.
