Meta, Amazon beat expectations, announce record profits

Meta and Amazon blew through expectations in their latest quarterly results as Big Tech continued to impress Wall Street.

Meta, the tech titan behind Facebook and Instagram, reported a profit of $14 billion in the final three months of last year, beating analyst forecasts as revenue climbed to $40.1 billion in the quarter.

The company said on Thursday that 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 percent to top $445 in after-market trade.

A year ago, after a catastrophic 2022 for Meta, Zuckerberg promised a "year of efficiency."

Between unprecedented layoffs, 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's impressive gains

Amazon also impressed investors with sales up to a more-than-expected $170 billion in the last quarter of last year, after a record-beating holiday season.

It, too, embraced "efficiency" last year eliminating some 27,000 jobs in a move it said was necessary after years of sustained hiring.

Amazon's shares have risen by 50 percent 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.

The company said more than one billion items were purchased worldwide during the company's Black Friday and Cyber Monday holiday shopping events.

Amazon said its employee count stood at 1.525 million at the end of 2023, down one percent from a year before.

Cloud doubts

Amazon's cloud business AWS, often described as the company's cash cow, grew 13 percent in the final three months of last year.

AWS revenue reaching $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 percent 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 AI and on Tuesday 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 EU's antitrust authority objected to the plan over competition concerns.