Meta Platforms has presented its financial forecasts for the first quarter of 2025, which fell short of analysts' expectations. This may affect the company's investment plans in artificial intelligence.
Meta's Fiscal Performance in Q4 2024
Meta Platforms reported a fourth-quarter revenue of about $48.4 billion, exceeding analysts' forecasts of $46.9 billion. However, its projected revenue for the first quarter of 2025, ranging from $39.5 billion to $41.8 billion, is below the average analysts' expectation of $41.72 billion. This discrepancy is due to the emergence of the Chinese company DeepSeek and financial strains associated with Meta's virtual and augmented reality projects.
Meta and Trump Administration Relations
Meta entered into a $25 million settlement with the Donald Trump administration concerning a 2021 lawsuit over Trump's Facebook and Instagram account suspensions. The settlement allocates $22 million to Trump's presidential library fund, with the remainder covering legal fees. This agreement might improve relations between Meta and the Trump administration, particularly as Mark Zuckerberg reportedly seeks to become Trump's AI advisor.
Impact of Chinese DeepSeek on AI Market
The Chinese startup DeepSeek launched its models that reportedly match and even outperform top US developments, including Meta's Llama, causing a significant selloff in global markets. Meta's substantial R&D expenses and capital expenditures for AI data centers may face scrutiny in light of these developments.
Competition in the artificial intelligence market is intensifying, which could impact Meta Platforms' financial outcomes and strategic development. Meanwhile, the settlement with the Trump administration may open new opportunities for the company.
