Meta showed strong Q4 2024 results – with Q4 revenue of $48.4B beating the Street by 3.2% - see Figure 1. It was also above Meta’s previous quarter guidance ($45-48B) – see Figure 2. Nevertheless, the company’s Q1 guidance was below market expectations (mid-range of only $40.65B vs. Street expectations of $41.7B).


Meta is an example of rapid adoption of AI tools (Meta AI)… currently there are around 500m MAU (monthly active users) of Meta AI, but there is also a strong growth from the advertisers side:
Susan Li, CFO:
“Advantage+ creative is another area where we’re seeing momentum. More than 4 million advertisers are now using at least one of our generative AI ad creative tools, up from one million six months ago.”
But within the company's business model, AI solutions will be monetized only once a large scale is built.
China's DeepSeek doesn't seem to be a problem for the company either, quite the opposite:
Mark Zuckerberg:
“I can start on the DeepSeek question. I think there’s a number of novel things that they did that I think we’re still digesting. And there are a number of things that they have advances that we will hope to implement in our systems. And that’s part of the nature of how this works, whether it’s a Chinese competitor or not. (…) And that’s sort of how the technology industry goes. I don’t know -- it’s probably too early to really have a strong opinion on what this means for the trajectory around infrastructure and CapEx and things like that. There are a bunch of trends that are happening here all at once. There’s already sort of a debate around how much of the compute infrastructure that we’re using is going to go towards pretraining versus as you get more of these reasoning time models or reasoning models where you get more of the intelligence by putting more of the compute into inference, whether just it will mix shift how we use our compute infrastructure towards that.”
After the DeepSeek events … Meta does not intend to reduce capital expenditures. CAPEX in 2025 will remain at the previously (before the DeepSeek revelations) announced level of $60-65B – a significant increase from 2024 – see Figure 3 and 4.


More from Mark Zuckerberg on CAPEX and DeepSeek:
“The field continues to move quickly. There’s a lot to learn from releases from basically everyone who does something interesting, not just the ones over the last month.
We’ll continue to kind of incorporate that into what we do as well as making novel contributions to the field ourselves. And I continue to think that investing very heavily in CapEx and infra is going to be a strategic advantage over time.
It’s possible that we’ll learn otherwise at some point, but I just think it’s way too early to call that. And at this point, 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 that we want to”.

Comments