Meta Platforms’ AI Outlook Might Overshadow Its Results
Meta Platforms is betting big on artificial intelligence. The company’s commentary about its AI investment program’s progress may be more important than near-term financial results.
The internet company will report its fourth-quarter earnings after the market close Thursday.
The Wall Street consensus estimate is that Meta will report revenue of $39.1 billion with adjusted earnings of $4.82 a share for the December quarter. Analysts’ estimates for the current quarter’s revenue is $33.9 billion and for earnings of $3.65 a share.
CEO Mark Zuckerberg has said AI would be the biggest investment area for both engineering and infrastructure this year. Earlier this month, the executive posted on Instagram that his company plans to have 350,000 Nvidia H100 graphics processing units—and almost 600,000 H100 equivalent GPUs based on total computing power—by the end of this year.
“We’re building massive compute infrastructure to support our future roadmap” for artificial intelligence, he wrote.
On Wednesday, BofA Global Research analyst Justin Post reiterated his Buy rating for Meta stock and reaffirmed his $425 price target.
We “see multiple tailwinds” for the stock, he wrote, citing Reels and messaging as “still early in monetization cycles.” He said Meta’s AI technology is likely to boost usage and advertising spending.
The analyst also noted Meta stock’s attractive valuation of 14 times earnings, excluding losses related to the Metaverse.
Meta stock has shot up 155% over the past 12 months, compared with the 28% rise for the Nasdaq Composite.