Street Calls of the Week
Investing.com -- Meta Platforms reported Wednesday better-than-expected fourth-quarter results, but its revenue guidance for the current quarter fell just shy of analyst estimates.
Meta Platforms Inc (NASDAQ:META) shares rose more than 2% in premarket trading Thursday.
For the three months ended Dec. 31, the company reported earnings of $8.02 a share on revenue of $48.39 billion. Analysts polled by Investing.com anticipated per-share income of $6.73 on revenue of $47.03B.
Family daily active people, or DAP, rose 5% to 3.35 billion on average for December 2024, from a year earlier.
For the first quarter, the company guided for total revenue to be in the range of $39.5B to $41.8B, or $40.65B at the midpoint, compared with estimates for $41.64B.
For the full-year total expenses were guided in the range of $114B to $119B, mostly driven by infrastructure costs. Full-year 2025 capital expenditures were expected in the range of $60B to $65B as company continues to spend on its generative AI efforts and core business.
Meta’s management acknowledged potential novel approaches at DeepSeek, a Chinese AI startup that released a powerful AI model that outperforms its US rivals for a fraction of the cost.
However, it added that it is still early days to understand the potential impact of DeepSeek’s advancements on infrastructure investment trends, with Meta continuing to see sustained investment as a source of competitive advantage.
"Meta shares are up modestly after hours, suggesting investors have grown increasingly comfortable with the company periodically leaning into investment cycles to support future growth," analysts at Canaccord Genuity commented.
"While the stock is trading at all-time highs, we think these results reinforce the opportunity for AI to drive further improvements in engagement and monetization, and continue to see the stock as a core holding for tech investors," they added.
The firm lifted its price target on Meta shares to $825 from $730.
JMP Securities analysts shared similarly bullish comments, saying they "continue to be impressed with Meta’s execution as it benefits from AI improving the relevance of its content and ads near term."
"Importantly, we believe it is still early in AI’s benefit to Meta’s core platform while it unlocks new services like Meta AI that could be meaningful over time," they added.
Yasin Ebrahim contributed to this report.