Meta Platforms (META) is gearing up to release its first quarter earnings report following the market close on Wednesday. Investors will likely focus on the company’s significant investments in artificial intelligence (AI) and recent workforce reductions aimed at positioning the business better for the AI era.
According to Bloomberg estimates, Meta is anticipated to announce adjusted earnings per share (EPS) of $8.15, with expected revenues of $55.5 billion. Earlier in January, the company projected first quarter revenues to fall between $53.5 billion and $56.5 billion.
So far in 2023, Meta’s stock has increased by approximately 2%, which is lower than the Nasdaq Composite’s gain of 6%. In the corresponding quarter from the previous year, Meta reported an EPS of $6.43 with revenues of $42.3 billion. In that same report, the company projected its total expenses for 2025 to be between $113 billion to $118 billion, while capital expenditures were expected to range from $64 billion to $72 billion.
As of the end of 2022, Meta’s realised expenses reached $117.7 billion with capital expenditures amounting to $72.2 billion. In January, the company projected its 2026 expenses to rise to a range of $162 billion to $169 billion, with capital expenditures projected to be $115 billion to $135 billion.
The updates on these projections will be closely watched by investors. Alongside other tech giants such as Microsoft (MSFT), Amazon (AMZN), and Alphabet (GOOGL), Meta is part of the big four hyperscalers who together pledged to invest over $650 billion in AI initiatives by 2026.
In a significant move last week, Meta announced a reduction of its workforce by 8,000 positions, amounting to 10% of its total staff, in addition to eliminating 6,000 open job roles. In a memo detailing the layoffs, Meta cited an ongoing drive for efficiency and the necessity to “offset the other investments we’re making.”
Investors will be keenly monitoring Meta’s upcoming earnings report to assess the impact of these strategic shifts on the company’s financial health and future outlook.
