Meta Platforms Surpasses Market Expectations with Strong Q4 Earnings

  • Meta Platforms (NASDAQ:META) reported earnings per share (EPS) of $8.02, beating analyst estimates.
  • The company's revenue reached $48.39 billion, driven by advancements in artificial intelligence (AI) enhancing its advertising business.
  • Despite impressive overall performance, Meta's Reality Labs segment saw static revenue growth and an operating loss of $4.97 billion.

Meta Platforms, trading on the NASDAQ under the symbol META, is a leading technology company known for its popular social media platforms, Facebook and Instagram. The company recently reported its fourth-quarter earnings for 2024, surpassing market expectations. Meta achieved earnings per share (EPS) of $8.02, exceeding the analyst estimate of $6.76. The company's revenue for the quarter reached $48.39 billion, surpassing the anticipated $46.99 billion.

Meta's strong performance is largely attributed to advancements in artificial intelligence (AI), which have significantly bolstered its core advertising business. The Family of Apps, which includes Facebook, Instagram, WhatsApp, and Messenger, generated total revenue of $47.3 billion, marking a year-over-year increase from $39 billion. Advertising revenue, a crucial component, rose to $46.8 billion, supported by AI technologies that improved ad impressions and increased the average price per ad by 6% and 14%, respectively.

Despite the impressive revenue figures, Meta's Reality Labs segment, which focuses on metaverse and augmented reality innovations, experienced static revenue growth at $1.08 billion. The operating loss for this segment widened to $4.97 billion. This aligns with Meta's strategy of investing heavily in AR/VR solutions for long-term gains, despite current financial pressures. The company's net income for the quarter was approximately $20.84 billion, while its gross profit stood at about $39.55 billion.

Meta effectively managed its costs, with expenses rising by 5% to $25 billion for the quarter, within the guidance range of $96-98 billion for 2024. The cost of revenue for Meta was approximately $8.84 billion. The company continues to navigate regulatory challenges in the EU and US, maintaining a focus on strategic adaptation. Before taxes, Meta's income was about $23.55 billion, and it incurred an income tax expense of approximately $2.72 billion.

Looking ahead, Meta projects first-quarter 2025 revenue between $39.5 billion and $41.8 billion, reflecting confidence in its core business growth driven by AI innovations. Expenses for 2025 are expected to rise significantly to $114-119 billion, with capital expenditures increasing to $60-65 billion, supporting AI infrastructure expansion. Investors should watch the impact of AI on advertising and user engagement, as well as the progress of Reality Labs in AR and VR technologies.

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Meta Doubles Down on AI With $14.3B Scale AI Deal, Citi Sees Long-Term Upside

Citi is maintaining its bullish stance on Meta Platforms (NASDAQ:META), reiterating a Buy rating and a $690 price target following the tech giant’s $14.3 billion investment in Scale AI. The deal grants Meta a 49% stake in the artificial intelligence firm, valuing Scale AI at $29 billion based on projected 2026 revenues of around $4 billion—a valuation roughly 7 times enterprise value to sales.

This strategic move deepens Meta’s commitment to AI innovation. As part of the agreement, Scale AI’s CEO Alexandr Wang will join Meta’s newly formed superintelligence team, although he will remain on Scale’s board. Jason Droege, formerly Chief Strategy Officer, will serve as interim CEO at Scale.

The investment is expected to accelerate Meta’s development of foundational AI technologies and large language models, particularly as it works to bring its next-generation Llama 4 model to market. The initiative aligns with Meta’s broader revamp of its AI leadership and its ambition to create a foundational AI operating system.

With over a billion monthly active users for Meta AI, enhanced recommendation systems, and improving engagement and conversion rates, Citi sees Meta as well-positioned to lead in the AI race. The Scale AI partnership is viewed as a strategic lever that could significantly amplify Meta’s long-term capabilities in the space.

Loop Capital Slashes Meta Target on Ad Weakness Fears, Maintains Buy Ahead of Q1 Report

Loop Capital lowered its price target on Meta Platforms (NASDAQ:META) from $900 to $695 while maintaining a Buy rating, citing concerns about weakening ad pricing pressure ahead of the company’s first-quarter earnings report, scheduled to be released on Wednesday.

The firm expects Meta to deliver solid Q1 results but warns that management may offer a softer second-quarter outlook. A key issue is the pullback by Chinese cross-border advertisers, who have been scaling back spending in the U.S. due to changes around the de minimis exemption and new tariff pressures. Since Meta is a primary channel for customer acquisition, the drop in aggressive Chinese ad spending is reducing bidding competition and dragging down overall ad prices.

Loop Capital estimates that about 40% of the revenue associated with this previously high-spending cohort could be lost, though some of that impact may be offset as ad inventory shifts to the next-highest bidders. Adding to the challenge, consumer engagement metrics like click-through and conversion rates have been weakening, which could force further budget reductions from performance marketers if the trend continues.

The analysts now project Meta will guide second-quarter revenue to between $40.5 billion and $43.0 billion, slightly below the current consensus of $43.9 billion. While lower than previous expectations, they believe this guidance could still be better than the market currently fears.

Despite the near-term pressures, Loop Capital continues to see upside for Meta longer term, justifying the maintained Buy rating even as caution grows around short-term advertising dynamics.

Loop Capital Slashes Meta Target on Ad Weakness Fears, Maintains Buy Ahead of Q1 Report

Loop Capital lowered its price target on Meta Platforms (NASDAQ:META) from $900 to $695 while maintaining a Buy rating, citing concerns about weakening ad pricing pressure ahead of the company’s first-quarter earnings report, scheduled to be released on Wednesday.

The firm expects Meta to deliver solid Q1 results but warns that management may offer a softer second-quarter outlook. A key issue is the pullback by Chinese cross-border advertisers, who have been scaling back spending in the U.S. due to changes around the de minimis exemption and new tariff pressures. Since Meta is a primary channel for customer acquisition, the drop in aggressive Chinese ad spending is reducing bidding competition and dragging down overall ad prices.

Loop Capital estimates that about 40% of the revenue associated with this previously high-spending cohort could be lost, though some of that impact may be offset as ad inventory shifts to the next-highest bidders. Adding to the challenge, consumer engagement metrics like click-through and conversion rates have been weakening, which could force further budget reductions from performance marketers if the trend continues.

The analysts now project Meta will guide second-quarter revenue to between $40.5 billion and $43.0 billion, slightly below the current consensus of $43.9 billion. While lower than previous expectations, they believe this guidance could still be better than the market currently fears.

Despite the near-term pressures, Loop Capital continues to see upside for Meta longer term, justifying the maintained Buy rating even as caution grows around short-term advertising dynamics.

Scotiabank Slashes Meta’s Price Target Amid Ad Weakness and Regulatory Pressure

Scotiabank reduced its price target on Meta Platforms (NASDAQ:META) to $525 from $627, while maintaining a Sector Perform rating, citing a convergence of headwinds weighing on the stock.

Meta shares have fallen roughly 16% year-to-date as investors react to a combination of macro uncertainty, weakening digital ad trends, and the sharp pullback in ad spending from Chinese e-commerce players—most notably Temu, which had accounted for about 5-6% of Meta’s revenue. Data from app stores suggests a steep decline in ad impressions after Temu halted its campaigns, a trend that could continue dragging on Meta’s top line.

Even though third-party data indicates that Meta’s revenue is currently trending slightly above sell-side expectations, analysts are expected to keep lowering their forecasts given the slowdown in Chinese direct-to-consumer ad budgets and the broader market retreat.

On top of advertising pressures, Meta is also contending with legal challenges. The company’s recent $450 million settlement offer to the FTC was far below the regulator’s $30 billion ask, and regulatory risks remain elevated. Hopes that a Trump-led FTC would ease scrutiny have not materialized, as the agency continues aggressive oversight.

According to the bank, rising tariff-related import costs may further weigh on advertising partner budgets, potentially compounding the softness in Meta’s ad business.

Scotiabank Slashes Meta’s Price Target Amid Ad Weakness and Regulatory Pressure

Scotiabank reduced its price target on Meta Platforms (NASDAQ:META) to $525 from $627, while maintaining a Sector Perform rating, citing a convergence of headwinds weighing on the stock.

Meta shares have fallen roughly 16% year-to-date as investors react to a combination of macro uncertainty, weakening digital ad trends, and the sharp pullback in ad spending from Chinese e-commerce players—most notably Temu, which had accounted for about 5-6% of Meta’s revenue. Data from app stores suggests a steep decline in ad impressions after Temu halted its campaigns, a trend that could continue dragging on Meta’s top line.

Even though third-party data indicates that Meta’s revenue is currently trending slightly above sell-side expectations, analysts are expected to keep lowering their forecasts given the slowdown in Chinese direct-to-consumer ad budgets and the broader market retreat.

On top of advertising pressures, Meta is also contending with legal challenges. The company’s recent $450 million settlement offer to the FTC was far below the regulator’s $30 billion ask, and regulatory risks remain elevated. Hopes that a Trump-led FTC would ease scrutiny have not materialized, as the agency continues aggressive oversight.

According to the bank, rising tariff-related import costs may further weigh on advertising partner budgets, potentially compounding the softness in Meta’s ad business.

Meta's Smart Glasses Ambitions Could Reshape Its Future; BofA Reiterates Buy

Bank of America is maintaining a Buy rating and $765 price target on Meta Platforms (NASDAQ:META) as the company reportedly gears up to introduce a new line of premium smart glasses—a potential game-changer for its hardware strategy.

The upcoming device, codenamed Hypernova, is expected to launch by the end of the year with a price tag between $1,000 and $1,400. According to reports, these next-gen glasses will come equipped with an integrated display for real-time updates, an enhanced camera on par with smartphones, a built-in AI assistant, and multiple input methods, including gesture control and a neural wristband that interprets brain signals.

Bank of America sees this product as a potential step forward in bridging the gap between augmented reality and daily usability, especially when compared to bulkier VR headsets. Still, success will depend on overcoming critical barriers like battery life, comfort, pricing, and—most importantly—the development of a killer app that drives broad consumer adoption.

At current trading levels around $580, Meta is valued at just 20x its 2026 projected GAAP EPS, or 16x excluding the costs of Reality Labs, suggesting that investors may be assigning little to no value to its hardware initiatives.

If the company can gain traction with its smart glasses, it could enhance control over its ecosystem, from user experience to data and distribution, further strengthening its core advertising and social media businesses. Meta may also unlock new revenue streams through AI-powered tools, accessories, and subscription offerings.

Bank of America believes the upcoming launch could be pivotal in shifting market perception of Meta’s Reality Labs division—from a costly experiment to a strategic asset with monetization potential.

Meta's Smart Glasses Ambitions Could Reshape Its Future; BofA Reiterates Buy

Bank of America is maintaining a Buy rating and $765 price target on Meta Platforms (NASDAQ:META) as the company reportedly gears up to introduce a new line of premium smart glasses—a potential game-changer for its hardware strategy.

The upcoming device, codenamed Hypernova, is expected to launch by the end of the year with a price tag between $1,000 and $1,400. According to reports, these next-gen glasses will come equipped with an integrated display for real-time updates, an enhanced camera on par with smartphones, a built-in AI assistant, and multiple input methods, including gesture control and a neural wristband that interprets brain signals.

Bank of America sees this product as a potential step forward in bridging the gap between augmented reality and daily usability, especially when compared to bulkier VR headsets. Still, success will depend on overcoming critical barriers like battery life, comfort, pricing, and—most importantly—the development of a killer app that drives broad consumer adoption.

At current trading levels around $580, Meta is valued at just 20x its 2026 projected GAAP EPS, or 16x excluding the costs of Reality Labs, suggesting that investors may be assigning little to no value to its hardware initiatives.

If the company can gain traction with its smart glasses, it could enhance control over its ecosystem, from user experience to data and distribution, further strengthening its core advertising and social media businesses. Meta may also unlock new revenue streams through AI-powered tools, accessories, and subscription offerings.

Bank of America believes the upcoming launch could be pivotal in shifting market perception of Meta’s Reality Labs division—from a costly experiment to a strategic asset with monetization potential.