What Wall Street is saying about Meta ahead of earnings

Meta Platforms (META), the parent company of Facebook, Instagram, WhatsApp, Oculus, Threads and other brands, is scheduled to report fourth quarter 2024 results after market close on Wednesday, January 29 with a conference call scheduled for 5 pm ET. Here’s what to watch for:

EXPECTATIONS: Last quarter, Meta Platforms reported earnings of $6.03 per share on revenue of $40.59B, topping analyst estimates in what founder and CEO Mark Zuckerberg called “a good quarter driven by AI progress across our apps and business.”

The company said at that time that it expected fourth quarter revenue to be in a range of $45B-$48B, versus the then-current consensus of $46.31B.

Meta added at the time that it expected full-year 2024 total expenses to be in the range of $96B-$98B, updated from a prior range of $96B-$99B.

Current consensus EPS and revenue forecasts for Meta’s December-end quarter stand at $6.76 and $46.99B, respectively, according to LSEG Data and Analytics. The consensus EPS and revenue forecasts for Meta’s March-end quarter reported by LSEG Data stand at $5.39 and $41.64B, respectively.

AI SPENDING: On January 24, CEO Mark Zuckerberg stated in a Facebook post: “This will be a defining year for AI. In 2025, I expect Meta AI will be the leading assistant serving more than 1 billion people, Llama 4 will become the leading state of the art model, and we’ll build an AI engineer that will start contributing increasing amounts of code to our R&D efforts… We’ll bring online ~1GW of compute in ’25 and we’ll end the year with more than 1.3 million GPUs. We’re planning to invest $60-65B in capex this year while also growing our AI teams significantly, and we have the capital to continue investing in the years ahead.”

Following the post, Piper Sandler reiterated an Overweight rating and $670 price target on Meta Platforms. The firm argued that the capex guide was widely anticipated, so this was now a “buy the news” event. The firm added that this was a “smart move” by Meta management to get ahead of the earnings call and inoculate the stock from a potential negative reaction.

Stifel also commented on Zuckerberg’s post that laid out some of Meta’s 2025 AI plans, most notably that the company is planning to invest $60B-$65B in capex this year to include Meta’s AI products, AI infrastructure and silicon plans. Based on the firm’s conversations, the analyst believes this capex range “brackets the high end of investors’ expectations,” though given the initial positive stock reaction, the analyst imagines “plenty of folks were north of that range.” Stifel, which thinks investors expect a total expense outlook of about $110B at the midpoint, will update its model post-Q4 earnings and keeps a Buy rating on Meta shares.

DEEPSEEK SELLOFF: The buzz around DeepSeek, a Chinese-built large-language open-source model that claims to rival offerings from OpenAI’s ChatGPT and Meta but using a much smaller budget, sent several U.S. technology stocks into negative territory to start this week. DeepSeek’s new AI model is being praised for being cost-effective and capable of running on less-advanced chips, which raised questions about the high valuations of companies like Nvidia (NVDA).

Jefferies views DeepSeek’s launch “as part of an ongoing evolution, not revolution” and calls the market selloff in software stocks “largely overdone.” Innovations which continue to drive increasing efficiency at inference, but also training, will further improve the return on investment of artificial intelligence, leading to faster software adoption, the analyst argues. Jefferies maintains its existing rationale for owning Microsoft and Amazon (AMZN) for enterprise, Meta and Alphabet (GOOGL) for consumer, and Snowflake (SNOW) for a potential data and AI “breakout play.” Inference efficiency is part of an ongoing trend with DeepSeek and not as incremental as some lead to believe, according to Jefferies.

On January 27, Stifel noted reports that suggest China’s DeepSeek was, in part, refined through distillation of Meta’s Llama models, which the firm believes to be “a violation of Meta’s policies.” Meta allows Llama models to be used for free until those apps or projects achieve 700M MAUs, which “is a big number, but perhaps this might entice Meta to lower the MAU threshold to begin explicit monetization,” the analyst tells investors. At “a minimum,” the rapid timeline at DeepSeek is “a testament to open source models,” which the firm views as “a positive development for Meta.” Cheaper and more efficient models, if DeepSeek is, in fact, “cheaper,” should equate to a pickup in demand for AI workloads, which should translate into greater consumption across Amazon’s AWS and likely Google’s GCP, adds the analyst, who views these developments as “neutral to positive” for Amazon and Google and suggestive that “current capex levels are likely justified in the near term.”

TIKTOK SAGA: On January 19, TikTok told its U.S. users: “Sorry, TikTok isn’t available right now. A law banning TikTok has been enacted in the U.S. Unfortunately, that means you can’t use TikTok for now. We are fortunate that President Trump has indicated that he will work with us on a solution to reinstate TikTok once he takes office. Please stay tuned! In the meantime, you can still log in to download your data.”

On Sunday, just 12 hours later, the service was restored with a message saying, “Thanks for your patience and support. As a result of President Trump’s efforts, TikTok is back in the U.S.”

President Donald Trump told NBC’s Kristen Welker in a phone interview that he will “most likely” give TikTok a 90-day reprieve from a potential ban in the U.S. after he takes office Monday. “I think that would be, certainly, an option that we look at. The 90-day extension is something that will be most likely done, because it’s appropriate. You know, it’s appropriate. We have to look at it carefully. It’s a very big situation,” Trump is quoted as having said.

On January 27, President Trump denied holding talks with Oracle (ORCL) about a TikTok deal, saying that he has “spoken to many people about TikTok,” though he expects a decision in the next 30 days, Reuters’ Dawn Chmielewski, Nandita Bose, Kanishka Singh, and Jeff Mason reported. Reuters previously reported the Trump administration was working on a plan to save TikTok that involves Oracle and a group of outside investors taking control of the app’s operations, but Trump said he had not spoken to Oracle’s Larry Ellison about buying the app. Asked if he was putting together a deal with Oracle and other investors to save TikTok, Trump said: “No, not with Oracle. Numerous people are talking to me, very substantial people, about buying it and I will make that decision probably over the next 30 days. Congress has given 90 days. If we can save TikTok, I think it would be a good thing.”

MENDING FENCES WITH TRUMP: Earlier this month, Meta said it is ending its third party fact-checking program and moving to a Community Notes model starting in the U.S. In a blog post, the company said “We will allow more speech by lifting restrictions on some topics that are part of mainstream discourse and focusing our enforcement on illegal and high-severity violations. We will take a more personalized approach to political content, so that people who want to see more of it in their feeds can… We’ve seen this approach work on X – where they empower their community to decide when posts are potentially misleading and need more context, and people across a diverse range of perspectives decide what sort of context is helpful for other users to see. We think this could be a better way of achieving our original intention of providing people with information about what they’re seeing – and one that’s less prone to bias.”

After Mark Zuckerberg posted a video in which he announced several changes to take place across Meta regarding the company’s free speech efforts and content moderation policies, Stifel called the replacement of fact-checkers with Community Notes the “most notable of these changes,” adding that such a feature became widely popular on X following Elon Musk’s acquisition of the company in 2022. The policy changes along with three new board additions, including Trump ally and UFC CEO Dana White, represent the latest in a series of actions taken by Zuckerberg and the company “that we view as efforts to not only offer an environment we believe the majority of users desire, but also gain favor with the incoming Trump administration,” according to the analyst, who kept a Buy rating on Meta shares.

The next day, President Trump told Fox News Digital that Meta has “come a long way” after the company announced it will end its fact-checking program and that Meta’s “presentation was excellent,” Brooke Singman reported.

On January 10, Axios’ Mike Allen and Sara Fischer reported, citing an employee memo, that Meta is abandoning major DEI programs, including for hiring, training, and selecting suppliers, effective immediately. The move comes amid the company’s efforts to make inroads with the incoming Trump administration, the authors say, noting that Meta said it was making the change because the “legal and policy landscape surrounding diversity, equity and inclusion efforts in the United States is changing.”

SENTIMENT: Click here to check out recent Media Buzz Sentiment on Meta as measured by TipRanks.