Meta and Microsoft Show AI Bets Still in Play

If we learned anything from tonight’s December-quarter earnings announcements from Microsoft and Meta Platforms, it’s that we’re still in a wait-and-see mode on artificial intelligence. In fact, Meta CEO Mark Zuckerberg declared that 2025 would be a “big year” because the trajectory of most of the company’s big bets—such as on its AI assistant—will be a “lot clearer by the end of this year.” In other words, by December we’ll know if Meta is wasting billions on AI or not.

That message didn’t seem to worry Wall Street. Meta had the benefit of reporting better than projected revenue growth for the quarter, boosted by solid ad expansion. That was enough for investors, who pushed up Meta stock in after-hours trading, even though the company projected slower revenue growth in the first quarter of 2025 than what it reported for the fourth quarter. At the same time, Meta is projecting that operating expenses will rise about 23% this year. That’s in addition to a projected 60% increase in capital expenditures for the year. It’s not exactly the formula for a healthy bottom line, not that investors seem to care.