Just testified before the Senate that his social media empire won’t harm kids, Meta(Mehta) Chief Executive Mark Zuckerberg will now report to shareholders when it reports its fourth-quarter earnings after the bell on Thursday.
Meta has been on a tear over the past 12 months, with its shares soaring 121% as of Thursday morning. In January, the company’s market capitalization once again exceeded the $1 trillion mark. 2024 is only a month away, but so far Meta stock is outperforming the likes of Apple (AAPL), Google (Google, Google),Microsoft(Microsoft Corporation) and Amazon (Amazon).
But if Meta is to maintain its popularity, it will need to achieve continued growth in ad sales, which should draw attention away from its continued investments in the Metaverse and its Reality Labs business.
Analysts expect Meta to post adjusted earnings of $5.05 per share for the quarter on revenue of $39.01 billion, according to Bloomberg consensus data, which would be a significant jump from the company’s $32.2 billion in revenue. Produced in the same quarter last year.
Advertising revenue is expected to reach $37.8 billion, up from $31.3 billion in the fourth quarter of 2022. Facebook’s daily active users are expected to exceed 2.07 billion, up from 2 billion last year. Daily active users of the app family should reach $3.11 billion, a significant jump from the $2.96 billion the company reported in the fourth quarter of 2022.
However, Meta’s real-life labs will continue to be a liability for the company. The unit, tasked with turning Zuckerberg’s vision of a virtual world into reality, is expected to report an operating loss of $4.1 billion. However, that figure is down from the $4.3 billion the company lost on its efforts last year.
The launch of Apple’s rival Vision Pro headset could increase consumer interest in AR/VR headsets and have a knock-on effect on Meta’s Quest line of headsets.
But Meta’s Reality Labs efforts have taken a backseat in investors’ minds as the company ramps up its investment in generative artificial intelligence. In January this year, Zuckerberg announced in a post on Instagram Reels that the company’s long-term strategy is to develop general artificial intelligence and make it open source.
There is no unified definition of generative artificial intelligence, but broadly speaking, it is an artificial intelligence that can think and learn like humans. In other words, it can understand a variety of concepts instead of focusing on a certain field.
Zuckerberg also said in the post that Meta is building out its artificial intelligence capabilities by spending billions of dollars on Nvidia GPUs.
The company is already using generative AI capabilities for advertisers to help them create ads, and its Meta AI chatbot is available through its various apps.
Now the company needs to tell Wall Street whether those investments are starting to pay off.