Wall Street watching for AI monetization, reaction to DeepSeek mania

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Meta will release its fourth-quarter earnings after the closing bell on Wednesday.
Shares in the tech giant were up 15% year-to-date through Tuesday.
Investors are on high alert for key details on AI monetization.

Meta will report fourth-quarter earnings on Wednesday after the closing bell.

Investors will be watching for key details on AI monetization. They’ll also be looking for any commentary around the sudden rise of DeepSeek, whose AI models roiled the tech industry this week, wiping out more than $1 trillion of market value.

Meta’s earnings-release time is shortly after 4 p.m. ET, and its conference call with analysts will start around 5 p.m.

Meta’s stock was up 15% year-to-date through Tuesday’s close, outpacing the the S&P 500’s 3% gain.

Bank of America: A slew of positive catalysts underway

At the Meta Connect developer conference, Mark Zuckerberg, head of the Facebook group Meta, shows the prototype of computer glasses that can display digital objects in transparent lenses. — Meta has said it would cut another 5% of its workforce this year, which could boost profit margins, according to Bank of America.Andrej Sokolow/picture alliance via Getty Images

A host of tailwinds may be building for Meta this year, Bank of America said.

Analysts wrote that the company is still in the early stages of monetizing its AI projects and integrating the tech into its messaging platforms, such as WhatsApp and Messenger.

Meta may also stand to benefit from any disruption to TikTok, with some firms potentially shifting to Meta to advertise.

“With a stable macro backdrop, a growing AI contribution to ad revenues, ramping messaging revenues, and continued cost discipline (recent headcount cuts), we remain positive on the stock in 2025,” analysts added.

The bank has a “Buy” rating on the stock. It raised its price target to $710 a share, implying 5% upside from current levels.

Meta earnings expectations: Fourth-quarter revenue estimate is $46.98 billion

4th quarter

Revenue estimate: $46.98 billion
- Advertising rev. estimate: $45.66 billion
- Family of Apps revenue estimate: $46.08 billion
- Reality Labs revenue estimate: $1.11 billion
- Other revenue estimate: $433.3 million
Operating income estimate: $20.09 billion
Operating margin estimate: 42.6%
EPS estimate: $6.78
Ad impressions estimate: +10.1%
Average price per ad estimate: +7.33%
Average Family service users per day estimate: 3.28 billion