Meta will release its fourth-quarter earnings after the closing bell on Wednesday.
Shares in the tech giant were up 15% year-to-date through Tuesday.
Investors are on high alert for key details on AI monetization.
Meta will report fourth-quarter earnings on Wednesday after the closing bell.
Investors will be watching for key details on AI monetization. They'll also be looking for any commentary around the sudden rise of DeepSeek, whose AI models roiled the tech industry this week, wiping out more than $1 trillion of market value.
Meta's earnings-release time is shortly after 4 p.m. ET, and its conference call with analysts will start around 5 p.m.
Meta's stock was up 15% year-to-date through Tuesday's close, outpacing the S&P 500's 3% gain.
CFRA Research: Increased focus on AI
Meta likely announced its plan for $60 billion of capex this year to emphasize its focus on artificial intelligence, CFRA Research said.
"We think it makes sense for META to get the news out of the way before earnings on Jan. 29 and note the increased focus on AI will likely translate to higher revenue potential over time," Angelo Zino, senior equity analyst at CFRA, wrote.
The firm reiterated its "Buy" rating on the stock.
Jefferies: Meta is a 'Top AI pick'
Meta appears to have strong growth momentum, Jefferies said in a note. Analysts estimated that Meta's revenue will come in around $46.5 billion over the fourth quarter, while first-quarter revenue guidance will be around $41.8 billion.
"Overall, we continue to be encouraged by META's ability to sustain DD rev growth, given the combination of higher engagement from AI investments, increased advertiser efficiency and ramping of incremental monetization formats (e.g. WhatsApp & Llama)."
The firm reiterated its "Buy" rating on the stock and issued a price target of $715, implying 5% upside from current levels.
Truist Securities: 'Key beneficiary of TikTok's mishaps'
Meta will likely be a key beneficiary of TikTok's challenges in the US, Truist Securities said in a note.
According to Sensor Tower, a social media analytics site, Threads saw a significant uptick in user time over the fourth quarter, likely due to the risk of TikTok being shut down, Truist said.
"We view META as a key beneficiary of TikTok's mishaps and as one of our 2025 favorites," Youssef Squali, a managing director at the firm, wrote in a note.
Truist reiterated its "Buy" rating on the stock and price target of $700, implying 3% upside from current levels.
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JMP: 'AI investment cycle appears early'
Meta has said it's planning more than $60 billion in capital expenditures this year and will expand its AI teams "significantly."
The announcement is a sign that markets are still in the early stages of the AI investment cycle, which is positive for mega-cap tech firms, JMP analysts said.
"Meta's willingness to invest also suggests to us that near-term revenue visibility is positive as we believe Meta continues to benefit from its AI product initiatives," the firm wrote in a note.
The firm maintained its "Market Outperform" rating on the stock and issued a price target of $750, implying 10% upside from current levels.
Bank of America: A slew of positive catalysts underway
A host of tailwinds may be building for Meta this year, Bank of America said.
Analysts wrote that the company is still in the early stages of monetizing its AI projects and integrating the tech into its messaging platforms, such as WhatsApp and Messenger.
Meta may also stand to benefit from any disruption to TikTok, with some firms potentially shifting to Meta to advertise.
"With a stable macro backdrop, a growing AI contribution to ad revenues, ramping messaging revenues, and continued cost discipline (recent headcount cuts), we remain positive on the stock in 2025," analysts added.
The bank has a "Buy" rating on the stock. It raised its price target to $710 a share, implying 5% upside from current levels.
Meta earnings expectations: Fourth-quarter revenue estimate is $46.98 billion
4th quarter
Revenue estimate: $46.98 billion
Advertising rev. estimate: $45.66 billion
Family of Apps revenue estimate: $46.08 billion
Reality Labs revenue estimate: $1.11 billion
Other revenue estimate: $433.3 million
Operating income estimate: $20.09 billion
Operating margin estimate: 42.6%
EPS estimate: $6.78
Ad impressions estimate: +10.1%
Average price per ad estimate: +7.33%
Average Family service users per day estimate: 3.28 billion
First quarter
Revenue estimate: $41.67 billion
Total expenses estimate: $108.03 billion
Capital expenditure estimate: $52.18 billion
Full year
Source: Bloomberg data
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