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Tech giants like Tesla (TSLA), Meta Platforms (META), Apple (AAPL), and Microsoft (MSFT) are set to report their quarterly earnings this week. The Federal Reserve’s January FOMC meeting is also this week, and while Jerome Powell is not expected to adjust interest rates, Fed commentary will be crucial to follow.
Tech names are entering earnings on a mixed note. Both Tesla and Apple are in the correction zone after having fallen over 10% from their recent highs. Microsoft hasn’t been able to revisit its all-time highs since July, and Nvidia (NVDA) started the week down more than 10%.
Meanwhile, both Meta and Amazon (AMZN) hit fresh record highs last week. The Facebook parent will release its Q4 earnings on Jan. 29 after the close of markets. In this article, we’ll look at the company’s Q4 earnings estimates and the various metrics that investors should watch in the report.
Meta Q4 Earnings Preview
Analysts expect Meta to report revenues of $46.9 billion in Q4 – a year-over-year rise of 17.2%. The estimates are in line with the company’s guidance which calls for revenues of between $45 billion and $48 billion in the quarter. Analysts are modeling Meta’s Q4 earnings per share (EPS) to rise almost 30% YOY to $6.90.
Along with the headline earnings metrics, I will watch the following during Meta’s upcoming earnings call.
- 2025 Guidance: Meta CEO Mark Zuckerberg has touted capex between $60 billion to $65 billion for 2025, which is not only significantly higher than the expected capex last year, but well ahead of Street estimates. During the Q4 earnings call, I will watch out for commentary on Meta’s 2025 guidance on revenues and expenses as well as more color on AI capex. Meta might also provide an update on its headcount after reports said that the company is looking to slash its workforce by 5% as Zuckerberg touted 2025 to “be an intense year,” according to an internal memo. I will also watch for commentary on Meta’s Reality Labs which continues to be a cash guzzler with losses rising incrementally every year.
- Overview of Ad Markets: Chinese companies trying to reach out to U.S. consumers were among the key drivers of Meta’s growth over the last few quarters. During the Q4 earnings call, the company might talk more about Chinese and other non-U.S. companies advertising on its platform amid President Donald Trump’s tariff threat.
- AI Monetization: In his Facebook post, Zuckerberg termed 2025 as “a defining year for AI.” Notably, he had labeled 2023 as the “year of efficiency” and the belt-tightening initiatives as part of that process helped trigger a spike in the company’s profits and by extension its share price. 2024 was the unsaid year of “AI pivot” for Meta and the company looks set to increase its AI outlay even further. During the Q4 earnings call, I am looking forward to more color on Meta’s AI monetization strategy amid growing capex. Also, the company is set to face questions related to China's DeepSeek, which could challenge U.S. tech companies’ AI models.
- Threads Monetization: Meta might also talk about Threads which it launched to take on Elon Musk’s X (formerly Twitter). Meta has announced a “limited, early test of ads in Threads” and I look forward to hearing more on that during the earnings call.
- Fact-Checking Program: Meta ended its third-party fact-checking program earlier this year and moved to a Community Notes model. The announcement came days before Donald Trump’s inauguration and the timing wasn’t lost on anyone. During Meta’s Q4 earnings call, the company might face questions about the new model and its reception from advertisers on its platform.
Meta Stock Forecast
Meta has a consensus rating of “Strong Buy” from the 52 analysts actively covering the stock, and shares are currently trading 4% below their mean target price of $676.35. Meta Platforms has a Street-high target price of $811 (via Rosenblatt Securities), which represents nearly 25% upside potential. Earlier this month, Deutsche Bank named Meta along with Reddit (RDDT) and Spotify (SPOT) as its top pick for 2025.
As I noted while analyzing Meta’s 2025 forecast, the stock's valuation is still reasonable. The company also seems to be warming up to the Trump administration despite the president’s Truth Social and key advisor Elon Musk’s X being competitors to its social media platforms. However, Meta would need a compelling story to keep its mammoth rally going. Can Zuckerberg deliver?
We’ll soon find out.
