Meta founder and chief executive Mark Zuckerberg expects 2025 to be a crucial year in reshaping the company’s engagement with governments, as regulatory pressures, artificial intelligence advancements and digital policy shifts continue to evolve.
“We now have a US administration that is proud of our leading companies, prioritises American technology winning and that will defend our values and interests abroad,” Mr Zuckerberg said during an investors’ call on Wednesday.
“I am optimistic about the progress and innovation that this can unlock."
Meta, the parent company of Facebook, is making notable changes to its content policies, seemingly aimed at strengthening ties with US President Donald Trump.
As part of this effort, the company recently announced the discontinuation of its third-party fact-checking programme across its platforms, stating that the move aims to promote free expression and mitigate concerns over bias in content moderation.
Meta's shares, which closed at $676.49 on Wednesday, surged 2.6 per cent to reach $694.18 a share in after-hours trading.
The stock has gained about 13 per cent so far this year and the company had a market value of about $1.71 trillion at close on Wednesday.
Huge profits fuel Meta’s bold AI investment plans
The company reported a 49 per cent annual increase in fourth-quarter net income to more than $20.8 billion.
Revenue during the October-December period rose 21 per cent to over $48.3 billion, beating analysts’ expectations of $47 billion. Earnings per share stood at $8.02 against the expectation of $6.77.
The company expects the current quarter's total revenue to be in the range of $39.5 billion to $41.8 billion, an annual growth of more than 8 per cent.
In the fourth quarter, advertising impressions across Meta’s family of apps and the average price for an advertisement soared by 6 per cent and 14 per cent year on year, respectively.
Meta’s family of apps includes Facebook, Instagram, Messenger and WhatsApp.
Starting in April, Meta stopped disclosing Facebook’s daily active users and monthly active users. It is now sharing a figure called “family daily active people”.
It stood at 3.35 billion in the last quarter, a yearly increase of almost 5 per cent.
“We continue to make good progress on AI, glasses and the future of social media … I am excited to see these efforts scale further in 2025,” Mr Zuckerberg said.
The company expects full-year 2025 total expenses to be in the range of $114 billion to $119 billion.
“We expect the single largest driver of expense growth in 2025 to be infrastructure costs … employee compensation to be the second-largest factor as we add technical talent in the priority areas of … reality labs [and] generative AI,” company chief financial officer Susan Li said.
The company’s Meta AI chatbot, which has surpassed 700 million monthly active users, is expected to reach more than one billion users this year, Mr Zuckerberg said.
This signals Meta is doubling down on its AI infrastructure and metaverse ambitions, even as investors grapple with the costs, said Jesse Cohen, senior analyst at Investing.com
“By beating both earnings and revenue estimates, they have demonstrated that cost discipline and efficiency gains are paying dividends,” Mr Cohen told The National.
Microsoft drops on weaker cloud earnings
Microsoft shares dropped almost 6 per cent in after-hours trading on Wednesday after the company reported softer earnings from its cloud division in its fiscal 2025 second quarter. Microsoft’s financial year ends in June.
Revenue in Microsoft’s intelligent cloud division, which includes Azure public cloud, increased 19 per cent annually to $25.54 billion in the three months ending December 31, lower than the $25.83 billion consensus of analysts surveyed by StreetAccount.
Since 2016, Microsoft has committed to building Azure into an AI supercomputer for the world, serving as the foundation of its vision to democratise AI as a platform.
Satya Nadella, chairman and chief executive of Microsoft, said: “Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175 per cent year-over-year.”
The company’s net profit surged 10 per cent on an annual basis to $24.1 billion in the December quarter.
Revenue during the September-December period jumped 12 per cent to nearly $69.6 billion, exceeding analysts' expectations of $68.7 billion.
“Even with better-than-expected results, the numbers weren't impressive enough to outshine the growing Capex risk, particularly in the face of an emerging and possibly better margins competition,” said Thomas Monteiro, senior analyst at Investing.com
“2025 is likely to be the most pivotal year on record for the AI revolution on the development side but also on the financial side, as investors expect to get the returns for the trillions of dollars invested over the past two years,” Mr Monteiro told The National.
Microsoft expects third-quarter revenue to hover between $67.7 billion and $68.7 billion, compared with analysts' expectations of $69.78 billion.
