(San Francisco) Meta (Facebook, Instagram, WhatsApp) and Amazon delighted Wall Street on Thursday with quarterly results well above expectations, with both groups benefiting from a strong holiday season, cost reductions in 2023 and the rapid integration of artificial intelligence tools into their services.
Meta achieved $40 billion in revenue in the fourth quarter, of which it posted $14 billion in net profit.
Its stock jumped 14% during electronic trading after the close of the New York Stock Exchange, also supported by a share buyback program.
Amazon’s revenues rose 14% year-on-year, reaching $170 billion over the same period, and its net profit stood at $10.6 billion.
Facebook, the original social network launched twenty years ago from a Harvard dorm, had 2.11 billion daily active users at the end of December, about 20 million more than at the end of September.
In total, nearly 4 billion people use at least one of the company’s services (social networks and messaging) every month.
“2023 was a surprisingly good year for Meta,” commented independent analyst Debra Williamson.
“Four factors contributed to the group’s recovery: investments in artificial intelligence to improve advertising performance, increased advertiser demand for Reels (short videos), spending by Chinese advertisers (Shein, Temu) and steady growth of the number of monthly users of the applications”.
A year ago, after a catastrophic 2022 for Meta, Mark Zuckerberg promised a “year of efficiency”.
Between layoffs, doubts about the metaverse and conflicts with the authorities, the past year has not been easy for the social media giant. At the end of October, around forty American states filed a complaint against him, accusing him of harming the “mental and physical health of young people”.
But from a market point of view, the boss “lived up” to his promise, notes Jasmine Enberg of Insider Intelligence.
“Meta may not be as innovative as Facebook was 20 years ago, but it knows how to execute,” she said, referring to the integration of new artificial intelligence (AI) technologies into its platforms. and a partnership with Amazon in the fourth quarter to counter TikTok’s advances in live sales within the app.
“Brilliant” celebrations
PHOTO PASCAL ROSSIGNOL, REUTERS
“Online spending was robust and shifted to several low-cost categories where Amazon saw rapid sales growth, such as food and beverage, health and personal care, and beauty. »
Amazon, for its part, generated $13.2 billion in operating profit, a key indicator of the group’s profitability.
“The end-of-year holidays were relatively auspicious in the United States,” noted Sky Canaves of Insider Intelligence. “Online spending was robust and shifted to several low-cost categories where Amazon saw rapid sales growth, such as food and beverage, health and personal care, and beauty. »
The analyst noted that the Seattle group is making the most of this period, from its promotional event for Prime subscribers in October, to Thanksgiving in November and “until the end of December thanks to the optimization of its logistics network which allows faster deliveries. »
The market was impatiently awaiting the results of AWS, the cloud (remote computing) branch of Amazon, world leader in this market which is exploding with the rise of generative AI.
AWS revenues were $24.2 billion, up 13% year-over-year.
Amazon announced Thursday the test launch of Rufus, an AI assistant supposed to help customers find products and make comparisons.
Its advertising activity increased by 27%, to 14.7 billion.
In this area, Meta will remain number two worldwide in 2024, behind Google.
Insider Intelligence forecasts ad revenue of $98.2 billion for Meta in 2024, or more than 14% of the global market. Instagram will be responsible for more than half of that amount.
But the Menlo Park group has some tough choices to make to stay at the top.
“Instagram is the app that brings the most new users to Meta. The company must find the right balance between generating revenue from this audience and ensuring its security,” emphasizes Jasmine Enberg.
The company will also have to “prove that its two big bets – AI and the metaverse – are complementary”
Reality Labs, the branch responsible for developing augmented and virtual reality tools and applications, widened its losses to 16 billion dollars over the past year, compared to 13.7 billion in 2022.