Mark Zuckerberg, CEO, Meta Platforms, in July 2021.
Kevin Dietsch | Getty Images News | Getty Images
Meta will report first-quarter results after the bell Wednesday.
Here’s what analysts are expecting.
Earnings per share: $4.32, according to LSEG.
Revenue: $36.16 billion, according to LSEG.
Daily active users (DAUs): 2.12 billion, according to StreetAccount
Monthly active users (MAUs): 3.09 billion, according to StreetAccount
Average revenue per user (ARPU): $11.75 according to StreetAccount
Meta has been a favorite on Wall Street since early 2023, when CEO Mark Zuckerberg told investors it would be the “year of efficiency.” The stock almost tripled last year, trailing only Nvidia among members of the S&P 500, and is up another 40% in 2024.
The Facebook parent has been clawing back digital ad market share after a dismal 2022. At that time, the company was reeling from Apple’s iOS privacy update and macroeconomic concerns that led many brands to rein in spending.
Zuckerberg spearheaded an initiative to rebuild the ad business with a focus on artificial intelligence. On the company’s last earnings call in February, finance chief Susan Li said Meta has been investing in AI models that can accurately predict relevant ads for users, as well as tools that automate the ads-creation process.
Analysts expect Meta to report a 26% increase in revenue from $28.65 billion a year earlier. That would mark the fastest rate of growth since the third quarter of 2021, which was before Apple’s privacy change started to show up on other companies’ balance sheets.
Meta is benefiting from a stabilizing economy and surge in spending from Chinese discount retailers like Temu and Shein, which have been pumping money into Facebook and company-owned Instagram in an effort to reach a wider swath of users. Analysts at Baird said in a Monday note that slower spending from China-based advertisers could be a source of concern in the first-quarter results.
Still, the Baird analysts see continuing momentum for Meta, and said they have “reasonably high” expectations for the company because of its improving advertiser tools and success in short-form video monetization.
Investors will remain focused on Meta’s costs, which have been central to the stock rally. Early last year, Zuckerberg said the company would be better at eliminating unnecessary projects and cracking down on bloat, which would help Meta become a “stronger and more nimble organization.”
The company cut about 21,000 jobs in the first half of 2023, and Zuckerberg said in February of this year that hiring will be “relatively minimal compared to what we would have done historically.”
As of Dec. 31, Meta had a global workforce of 67,317, down from a peak of more than 87,000 employees in 2022, according to Securities and Exchange Commission filings.
Jefferies analysts wrote in a report last week that it’s “hard to argue with excellence.” The analysts expect Meta to beat on its first-quarter results and provide better-than-expected guidance for the second quarter. As of now, the average analyst estimate calls for revenue growth of 20% in the second quarter to $38.29 billion, according to LSEG.
“We continue to be encouraged by META’s ability to sustain double-digit rev growth, given the combination of higher engagement from AI investments, and increasing advertiser ROI & efficiency,” the Jefferies analysts wrote.
Meta’s Reality Labs unit, which houses the company’s hardware and software for development of the nascent metaverse, continues to bleed cash. Analysts expect the division to show an operating loss of $4.31 billion for the quarter, on top of the $42 billion it’s lost since the end of 2020. Revenue in the unit is projected to reach $512.5 million, a 51% increase from $339 million a year earlier.
Executives will discuss the company’s results on a call with analysts at 5 p.m. ET.
A little-known AI lab out of China has ignited panic throughout Silicon Valley after releasing AI models that can outperform America’s best despite being built more cheaply and with less-powerful chips.
DeepSeek, as the lab is called, unveiled a free, open-source large-language model in late December that it says took only two months and less than $6 million to build, using reduced-capability chips from Nvidia called H800s.
The new developments have raised alarms on whether America’s global lead in artificial intelligence is shrinking and called into question big tech’s massive spend on building AI models and data centers.
In a set of third-party benchmark tests, DeepSeek’s model outperformed Meta‘s Llama 3.1, OpenAI’s GPT-4o and Anthropic’s Claude Sonnet 3.5 in accuracy ranging from complex problem-solving to math and coding.
DeepSeek on Monday released r1, a reasoning model that also outperformed OpenAI’s latest o1 in many of those third-party tests.
“To see the DeepSeek new model, it’s super impressive in terms of both how they have really effectively done an open-source model that does this inference-time compute, and is super-compute efficient,” Microsoft CEO Satya Nadella said at the World Economic Forum in Davos, Switzerland, on Wednesday. “We should take the developments out of China very, very seriously.”
DeepSeek also had to navigate the strict semiconductor restrictions that the U.S. government has imposed on China, cutting the country off from access to the most powerful chips, like Nvidia’s H100s. The latest advancements suggest DeepSeek either found a way to work around the rules, or that the export controls were not the chokehold Washington intended.
“They can take a really good, big model and use a process called distillation,” said Benchmark General Partner Chetan Puttagunta. “Basically you use a very large model to help your small model get smart at the thing you want it to get smart at. That’s actually very cost-efficient.”
Little is known about the lab and its founder, Liang WenFeng. DeepSeek was was born of a Chinese hedge fund called High-Flyer Quant that manages about $8 billion in assets, according to mediareports.
But DeepSeek isn’t the only Chinese company making inroads.
Leading AI researcher Kai-Fu Lee has said his startup 01.ai was trained using only $3 million. TikTok parent company ByteDance on Wednesday released an update to its model that claims to outperform OpenAI’s o1 in a key benchmark test.
“Necessity is the mother of invention,” said Perplexity CEO Aravind Srinivas. “Because they had to figure out work-arounds, they actually ended up building something a lot more efficient.”
A 3D-printed miniature model of U.S. President-elect Donald Trump and TikTok logo are seen in this illustration taken January 19, 2025.
Dado Ruvic | Reuters
President Donald Trump wants a U.S. investor to take a major stake in ByteDance’s TikTok. Several parties are in contention even as potential buyers face a litany of legal hurdles and barriers.
After stepping in to restore TikTok in the U.S. and delaying a law that would effectively ban the app, Trump is looking for avenues to keep the popular platform afloat.
He has put forward a proposal for an American stakeholder to buy the company and then sell a 50% stake to the U.S. government, which will jointly run the app along with the private party.
So, who are the likely contenders for one of the most popular apps in the U.S.?
Bloomberg reported earlier this month that the Chinese government was considering a plan to have Musk acquire TikTok’s U.S. operations, citing anonymous sources. That followed a report from the Wall Street Journal, which claimed TikTok’s CEO had been soliciting advice from Musk ahead of Trump’s inauguration.
CNBC was unable to reach Musk for comment.
“Elon Musk continues to be front and center as a potential bidder for TikTok which likely includes some tech partners/outside investors to get a deal done,” Wedbush said in a research note on Wednesday.
“Musk would be hand picked by Beijing and his ironclad relationship with Trump would make this a very logical choice in our view,” the note added.
Nat Schindler, an analyst at Scotiabank, also noted that Musk’s acquisition of Twitter has demonstrated his interest in global social media platforms. However, he also sees some potential obstacles for the tech tycoon.
“Musk is under fire already for owning X and the perception that he is using it to promote certain political ideas, and any involvement in TikTok could draw additional fire and potentially antitrust scrutiny,” Schindler said.
“What I’m thinking about saying to somebody is, buy it, and give half to the United States of America. Half and we’ll give you the permit,” Trump said before turning to Ellison to ask if the deal sounded reasonable.
“Sounds like a good deal to me Mr. President,” Ellison replied.
Ellison and his company are currently at the center of the TikTok dilemma, operating as a cloud infrastructure provider for ByteDance in the U.S.
Given its existing relationship with Tiktok, Oracle and is “directly invested in Tiktok’s success in the region,” Scotiabank’s Schindler said.
Ellison had bid for Tiktok, along with Walmart, back in 2020 when Trump first pushed for a ban on the platform. Neither company responded to CNBC’s request for comment.
Trump had approved of the Walmart-Oracle deal in principle, which would’ve seen the tech and retail giants partner to take over the video-sharing app in the U.S., avoiding a shutdown. However, the Trump administration’s attempt to ban TikTok in the U.S. fell through in the face of legal challenges.
Ellison later joined a group of investors that helped Elon Musk buy social media platform Twitter, now known as X, in 2022.
“[We believe] Oracle/Ellison could play a pivotal role in any deal given their key technology partnership with TikTok and his appearance at the White House with Project Stargate,” Wedbush said.
Wedbush added that it expects a slew of TikTok bids to come over the coming weeks from a host of players with Musk and Ellison leading the pack.
Meta and Google didn’t immediately respond to a CNBC inquiry.
Sarah Kreps, the director of the Tech Policy Institute at Cornell University, however, warned that players such as Meta, Google and Musk getting a substantial stake in TikTok could raise antitrust questions.
Scotiabank analyst Nat Schindler noted that there were also a number of other players, including existing investors BlackRock, Coatue, and General Atlantic, who own a large chunk of TikTok’s parent company. According to him, some of these investors are likely to participate in any sale of the U.S. platform by investing in the new entity.
“Other large VCs, hedge funds, and asset managers from Tiger to Fidelity would also likely show interest in a fast growing global platform with such a huge viewer base,” said Schindler, adding that finding investors to own a part of Tiktok won’t be a problem.
Media reports have also mentioned Donaldson and a group of investors preparing to make a bid for TikTok.
On Thursday, Matthew Hiltzik, a spokesperson for Donaldson, told CNBC that “Several potential buyers are in ongoing discussions with Jimmy, but he has no exclusive agreements with any of them.”
Following Trump’s comments on a 50% stake in the platform, both McCourt and O’Leary told CNBC this week that they were interested in a TikTok deal and were hoping to work with Trump to make it happen.
McCourt has also told CNBC that he wants TikTok to run a decentralized social networking protocol, or DSNP, overseen by the Project Liberty Institute, a nonprofit founded by the billionaire.
Bidding interest aside, a number of legal and tech experts have told CNBC that Trump’s executive order to delay the TikTok ban contradicts the Supreme Court’s earlier ruling to uphold the PAFACA and could face legal opposition.
Beijing and its pending negotiations with Trump regarding trade with the U.S. is also expected to play a determining factor in whether the Chinese government would allow ByteDance to make a divestiture.
“In this game of high stakes poker between the Trump Administration and Beijing it’s clear TikTok is a big chip on the table,” Wedush said
Tesla will start deliveries of a revamped version of its Model Y SUV in the U.S. in March, according to new listings on the company’s website.
The Model Y Juniper has a price tag of $59,990, not including a federal tax credit of $7,500 for new electric vehicle purchases. It features a redesigned fascia, front and rear light bars and an upgraded interior with ventilated seats, reclining second-row seats and faster Wi-Fi, the website shows.
Tesla began taking orders for the new Model Y variant from customers in Canada and Europe on Thursday, and started sales in China about two weeks ago. CEO Elon Musk shared a video from the Tesla account on X Thursday night showing off the new Model Y.
Tesla is looking to revitalize its core automotive business, which faces increased competition across the globe. Executives are expected to discuss Tesla’s fourth-quarter and year-end results on Wednesday after markets close.
Tesla’s last new model, the angular steel Cybertruck, began rolling out to customers at the end of 2023. While it became the best-selling electric truck in the U.S. last year, sales didn’t make up for a decline in overall deliveries, which fell for the first time in 2024.
Musk, who also runs SpaceX and owns social media site X, has been at the center of attention in recent months because of his hefty financing of President Donald Trump’s 2024 campaign and his position in the newly elected president’s inner circle.
After his inauguration on Monday to begin his second White House term, President Trump signed an executive order indicating he will likely repeal the federal electric vehicle tax credit, which was approved by Congress during the Biden administration as part of the Inflation Reduction Act. Tesla has long benefited from the government-supported incentives, but ending the credits will likely have a more harmful impact on competitors in the EV market.
Prior to the release of the new Model Y variant, Musk’s political rhetoric, along with Tesla’s aging lineup, had led to a decline in the company’s reputation according to research from Brand Finance.