Topline
Meta will rapidly ramp up its spending in 2025 as part of its artificial intelligence push, according to its centibillionaire CEO Mark Zuckerberg announced Friday, as the battle between Meta and its generative AI competitors including OpenAI and Elon Musk’s xAI comes to the forefront this week with President Donald Trump’s announcement of the $500 billion “Stargate” joint venture with OpenAI.
Mark Zuckerberg, center, at Trump’s inauguration.
Key Facts
“This will be a defining year for AI,” Zuckerberg said on the company’s Threads social media site, continuing with updates and predictions for Meta’s AI push in 2025.
Perhaps Zuckerberg’s biggest revelation Friday was his guidance for $60 billion to $65 billion in capital expenditures for Meta in 2025.
That’s well above consensus analyst forecasts of $51 billion in capital expenditures this year, according to FactSet, and Zuckerberg’s median projected capex of $62.5 billion would be 63% above Meta’s $38.4 billion in projected 2024 capex and 129% above its $27.3 billion in 2023 capex.
Meta will expand its “AI teams significantly” as part of its increased spending, declared Zuckerberg.
The billionaire also predicted Meta’s Llama 4 large-language model “will become the leading state of the art” AI model and it will end 2025 with more than 1.3 million graphics processing units, the highly coveted Nvidia-designed processors powering generative AI programs including Meta AI, xAI’s Grok and OpenAI’s ChatGPT.
Meta Stock Rises
After initially declining about 1% premarket following Zuckerberg’s announcement, shares of Meta rallied Friday, advancing as much as 1.6% shortly after market open before settling into a 0.9% gain by midmorning. Meta stock scored a record intraday share price of $646.90 and all-time high market value of more than $1.6 trillion. Meta shares are up more than 8% year-to-date.
Key Background
Zuckerberg’s 2025 outlook comes during a whirlwind week for generative AI after Trump capped his first full day in office announcing a $500 billion joint venture designed to build out the data center infrastructure to power OpenAI’s technology. Stargate was considered a win for OpenAI in its battle against the likes of xAI, Meta and Amazon-backed Anthropic to build out the best artificial general intelligence model, and the project highlighted a very public feud between Musk and OpenAI CEO Sam Altman as Trump’s close ally Musk apparently undercut the president. Meta’s push beyond social media dates back to its 2021 name change from Facebook to Meta. Wall Street initially revolted at the company’s billions of dollars in advanced tech research, as Meta stock crashed 64% in 2022, before improving financial performance and a broader investor rush into all things AI bolstered the stock’s turnaround. Since Trump won a second term in November, Zuckerberg has overseen a major culture shift at his company, ending its fact checking and diversity, equity and exclusion (DEI) programs as Zuckerberg decried the company’s culture as losing its “masculine energy.” Meta remains an advertising company on paper, with 98% of revenue in its most recent quarter coming from social media ads.
Forbes Valuations
Zuckerberg is the fourth-richest person in the world with a $222 billion net worth, trailing only fellow American technology moguls in Tesla CEO Elon Musk, Amazon chairman Jeff Bezos and Oracle chairman Larry Ellison. Zuckerberg owns about 13% of Meta, a stake worth about $200 billion.
What To Watch For
Meta will report financial results from 2024’s fourth quarter Wednesday afternoon. Consensus estimates call for $6.75 earnings per share and $47 billion in revenue, which would both be quarterly records.