Meta crushes Wall Street’s profit targets as Zuckerberg dismisses DeepSeek threat – News

Shares of Facebook parent company Meta Platforms Inc. gained more than 2% in extended trading today after it posted solid fourth-quarter results that surpassed analysts’ expectations.

Chief Executive Mark Zuckerberg (pictured) took the opportunity to heap praise on new U.S. President Donald Trump, saying his administration will redefine the company’s relationship with the government.

Meta reported earnings before certain costs such as stock compensation of $8.02 per share, crushing the analyst forecast of $6.77 per share. Revenue for the period came to $48.39 billion, beating the $47.04 billion target. All told, Meta’s net income rose 49% from a year earlier, to $20.8 billion.

For the current quarter, Meta is looking for revenue of between $39.5 billion and $41.8 billion, which is slightly below the Street’s call for sales of $41.73 billion.

The lower guidance was the only real blip, though, as Zuckerberg had plenty to say about the success of Meta’s ongoing artificial intelligence initiatives. He told analysts on a conference call that the company’s Meta AI chatbot now has more than 700 million monthly active users. That’s up from 600 million in December, and the CEO believes that number will grow to more than a billion this year.

If it does that, it’s likely to bring immense benefits to the company. “Once a service reaches that kind of scale, it usually develops a durable, long-term advantage,” Zuckerberg said.

Zuckerberg also dismissed any concerns investors may have over the emergence of Chinese AI startup DeepSeek, whose DeepSeek-R1 reasoning model has wowed users with its ability to match the performance of its American competitors, despite being built at a fraction of the cost.

The CEO said DeepSeek’s success validates Meta’s commitment to open-source AI models. The company has long pushed its family of Llama large language models as an alternative to proprietary AI offerings from the likes of OpenAI and Google LLC.

“There’s going to be an open-source standard globally,” Zuckerberg insisted. “For our own national advantage, it’s important that it’s an American standard.”

He added that the company has just finished training a mini version of Llama 4, its most advanced LLM, and is also making “great progress” in the development of a larger version of that model. Neither has yet been released.

Zuckerberg also insisted that Meta’s massive, multibillion-dollar investments in AI infrastructure are a worthwhile endeavor. Last week, the company reiterated its plans to spend between $60 billion and $65 billion in capital expenditure in fiscal 2025, saying that most of this money would be used to fund the construction of AI data centers. Although some analysts have begun to question if such expenditure is really necessary considering that DeepSeek’s model might have cost only a few million dollars to train, Zuckerberg said it’s too early to make such a call.

“It’s possible we’ll learn otherwise at some point,” he admitted. “But I would bet that the ability to build out that kind of infrastructure is going to be a major advantage for both the quality of the service and being able to serve the scale we want to.”

Meta said that its number of daily active users across Facebook, WhatsApp, Instagram and its other applications reached 3.35 billion at the end of the quarter, up from 3.29 billion three months earlier. Wall Street had projected 3.32 billion daily active users.

The company’s capital expenditure and operating costs came to $25 billion in the quarter, up 5% from the same period last year.

Meta’s finance chief Susan Li declined to provide a revenue outlook for fiscal 2025 but said the company’s ongoing investments in its core business will give it the opportunity to “continue delivering strong revenue growth” throughout the year.

Meanwhile, the company continues to throw billions of dollars at the black hole otherwise known as its Reality Labs business unit, which develops metaverse-related technologies such as augmented and virtual reality devices. That business logged an operating loss of just over $5 billion in the quarter, with revenue clocking in at $1.1 billion.

Li said the company’s total expenses in 2025 will come to about $114 billion to $119 billion, with most of that money to be spent on data center infrastructure. The company also plans to hire more staff for its generative AI, Reality Labs, infrastructure, monetization and compliance teams, she said. Its headcount rose to just over 74,000 at the end of last month, up 10% from a year earlier.

Zuckerberg told analysts that he believes the Trump administration is proud of America’s leading technology companies, and will work to defend its values and interests. “I am optimistic about the progress and innovation that this can unlock,” he said.

His comments came as Meta agreed to pay $25 million to settle a lawsuit with Trump, who had sued the company after it suspended his Facebook and Instagram accounts in the wake of the insurrection at the U.S. Capitol in January 2021.

Zuckerberg has appeared eager to smooth over his formerly rocky relations with Trump. In December, Meta donated $1 million toward the President’s inauguration fund, just weeks after Zuckerberg dined with him at his Mar-a-Lago resort in Florida.

This month, Zuckerberg also announced that Meta will shut down its third-party fact-checking teams in an effort to “restore free expression” to its social media platforms. He justified the move by saying that many of the fact checkers had shown too much political bias and “destroyed more trust than they’ve created.”

The decision was viewed as a concession to Trump, who has long argued without evidence that social media platforms are biased against conservative viewpoints.

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