Meta reports fourth-quarter earnings as generative AI takes center stage

Fresh off testifying before the Senate that his social media empire doesn’t hurt children, Meta (META) CEO Mark Zuckerberg will now meet with shareholders as his company reports its fourth-quarter earnings Thursday after the bell.

Meta has soared over the past twelve months, with shares up 121% as of Thursday morning. In January, the company’s market capitalization once again crossed the $1 trillion mark. We’re only a month into 2024, but so far, Meta’s stock has outperformed Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

But if Meta wants to continue its success, it will need to achieve sustained ad sales growth, which should take the spotlight off its continued investments in the metaverse and its Reality Labs business.

For the quarter, analysts expect Meta to post adjusted earnings per share of $5.05 on revenue of $39.01 billion, according to Bloomberg consensus data. That would represent a significant increase over the company’s $32.2 billion in revenue generated in the same quarter last year.

Projected advertising revenue is expected to reach $37.8 billion, up from $31.3 billion in the fourth quarter of 2022. The number of daily active Facebook users is expected to exceed 2.07 billion, an increase compared to last year’s 2 billion. The family of daily active app users should reach 3.11 billion, a significant jump from the 2.96 billion the company reported in Q4 2022.

However, Meta’s Reality Labs will remain a burden on the company. The division, which is tasked with making Zuckerberg’s vision of the metaverse a reality, is expected to report operating losses of $4.1 billion. However, that is a decrease of…

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