Internet giants Meta Platforms and Amazon.com on Thursday blew through expectations in their latest quarterly results, as Big Tech companies continued to impress Wall Street.
Meta, the tech titan behind Facebook and Instagram, reported a profit of US$14 billion in the final three months of last year, beating analyst forecasts as revenue climbed to US$40.1 billion in the quarter.
The company said Facebook’s monthly users stood at 3.07 billion people, 20 years after the platform was founded by Mark Zuckerberg in a Harvard dorm.
“We had a good quarter as our community and business continue to grow,” Meta CEO Zuckerberg said in an earnings release.
Meta shares jumped more than 14 per cent to top US$445 in aftermarket trade.
A year ago, after a catastrophic 2022 for Meta, Zuckerberg promised a “year of efficiency”.
Between unprecedented lay-offs, doubts about the company’s embrace of virtual reality and feuds with regulators, that year had not been an easy one for the social networking giant.
Facebook changed its parent company name to Meta in late 2021 due to Zuckerberg’s yet to be proven vision of virtual worlds referred to as the “metaverse” being the next major computing platform.
“The ‘Year of Efficiency’ has paid off, with both headcount and costs dropping, and Meta exceeding our expectations for full-year 2023 ad revenue,” said analyst Jasmine Enberg of Insider Intelligence.
Amazon also impressed investors with sales up to a more-than-expected US$170 billion in the fourth quarter of last year, after a record-beating holiday season.
The company also embraced “efficiency” last year by eliminating some 27,000 jobs, in a move it said was necessary after years of sustained hiring.
Amazon’s shares have risen by 50 per cent in the past 12 months as investors applauded its aggressive cost-cutting and an increase in sales.
“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” CEO Andy Jassy said in a statement.
Amazon said more than one billion items were bought worldwide during the company’s Black Friday and Cyber Monday holiday shopping events.
The company said its employee count stood at 1.525 million at the end of 2023, down one per cent from a year before.
Amazon Web Services (AWS), the company's cloud business that is often described as its cash cow, grew 13 per cent in the final three months of last year.
AWS revenue reaching US$24.2 billion in the quarter was better than feared, with some concerned it might slow, according to Baird Equity Research.
“The mild acceleration of growth from previous quarters leaves some lingering doubts about whether the cloud unit will be able to hold its own against rivals,” said Insider Intelligence analyst Sky Canaves.
Amazon saw an impressive increase of 26 per cent in its advertising business, as it bolsters its position as a rival to ad behemoths Meta and Google.
Much like Meta, the company founded by Jeff Bezos is also expanding into artificial intelligence (AI). On Tuesday, the company said it was testing a chatbot named Rufus that would provide shopping tips to US mobile app customers.
“We’re building dozens of generative AI applications across the company,” Jassy said on an earnings call.
Like most tech titans, Meta and Amazon face increased regulatory scrutiny.
At a heated hearing in the US Congress on Wednesday, Zuckerberg was asked to give a public apology to the families of child victims of sexual exploitation on his platforms.
Meta is facing a major lawsuit brought by about 40 US states jointly suing the company over alleged failures with children.
Amazon is being sued by the top US antitrust regulator that accuses the online retail giant of running an illegal monopoly by strong-arming independent sellers on its platform and stifling potential rivals.
It was also forced to abandon its buyout of the iRobot vacuum maker after the European Union’s antitrust authority objected to the plan over competition concerns.