Meta's stock surges following robust Q4 results, AI investment plans
What's the story
Meta Platforms, previously Facebook, saw its stock value soar by nearly 4% in after-hours trading.
The surge came after the company announced plans to invest "hundreds of billions of dollars" into artificial intelligence (AI) infrastructure in the long run.
CEO Mark Zuckerberg made the announcement during the company's earnings call.
Meta's fourth-quarter earnings for 2024 surpassed Wall Street's expectations, driven by progress in AI, smart glasses, and social media.
Financial performance
Meta posts revenue of $48.4B for Q4, a 21% increase
Meta posted revenues of $48.4 billion for the December quarter, a 21% increase year-on-year. Earnings per share stood at $8.02 with a net income of $20.8 billion.
For the entire fiscal year, Meta's revenue stood at $164.5 billion—up 22% year-on-year.
Analysts had predicted Meta would report revenues of $47 billion for the quarter ending in December 2024. However, the company surpassed these estimates.
Revenue forecast
Meta's Q1 revenue guidance falls short of expectations
Despite the strong Q4 performance, Meta's first-quarter revenue guidance for 2025 was below expectations.
The company projected revenues between $39.5 billion and $41.8 billion, missing the expected $41.7 billion.
However, this didn't shake investor confidence as the company's shares closed up by 0.32%.
So far this year, Meta's stock has seen an overall increase of about 15.5%.
AI expansion
Zuckerberg outlines Meta's ambitious AI investment plans
Recently, Zuckerberg revealed Meta will invest $60-$65 billion in capital expenditures on AI this year.
He envisions Meta's AI serving over one billion people by 2025 and expects the company's Llama 4 model to become a leading state-of-the-art model.
To facilitate this growth, Meta is building a data center with a capacity of over two gigawatts, bringing about one gigawatt of compute power online in 2025.
Workforce changes
Meta plans to grow AI teams and reduce headcount
Zuckerberg also revealed plans for Meta to grow its AI teams significantly.
This comes despite an earlier announcement of a proposed 5% workforce reduction for the company, aimed at "low-performers."
These cuts are part of a strategy to manage out people who aren't meeting expectations over the course of a year, with more extensive performance-based cuts planned during this cycle.