"Meta remains a digital advertising juggernaut. Its ad revenue soared 24% year over year in Q4 to $58.1 billion. And AI is transforming the company's core ad business, boosting revenue and profits. In Q4, Meta changed the architecture of the GEM model it uses for ad ranking and doubled the number of GPUs used to train the AI model. The results were impressive: a 3.5% increase in ad clicks on Facebook, with a 1%+ increase in ad conversions on Instagram."
"The speed of software development is critical to Meta's growth story. Thanks to agentic coding -- the use of agentic AI to write, test, and debug software with minimal human intervention -- the company's output per engineer has jumped 30% since the beginning of 2025. Meta's productivity improvement is even more impressive with power users, with AI coding tools increasing their output by a staggering 80% year over year."
AI is materially improving Meta's advertising performance and internal productivity. Ad revenue grew 24% year over year in Q4 to $58.1 billion. Changes to the GEM ad-ranking architecture and doubling GPU capacity produced a 3.5% lift in Facebook ad clicks and over a 1% lift in Instagram ad conversions, with further gains expected. Agentic coding has increased output per engineer by 30% since early 2025 and boosted power-user output by about 80% year over year. Smart glasses and personal superintelligence are cited as major growth opportunities. Reality Labs losses are projected to begin declining after 2026, improving profitability.
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