It’s a Big Week for Meta and TikTok
April 22, 2024—In the same week META will report quarterly earnings, one of its biggest competitors—TikTok—is facing an existential crisis. Here's what I'm expecting will happen:
✅ The Senate will pass legislation containing a package much-needed foreign aid—along with a significant blow to TikTok's business momentum. Biden will sign the legislation into law. TikTok will file an immediate lawsuit seeking to challenge the law. I predict that within days, at least one credible suitor will emerge.
✅ On Wednesday afternoon, I predict META will report Q1 total revenue at or above guidance (guidance is $34.5 to $37B). If it matches the top end of guidance, that would amount to 29% year-over-year growth.
Factors I believe are driving growth include the Advantage+ suite of ad products, Reels revenue, and core Facebook, which continues to perform strongly even at 20+ years old.
China advertisers are another factor, though perhaps less of one than in Q4. Last year, China advertisers made up 10% of META's total revenue.
The big story that will dominate the call is AI. AI is THE battleground for every big tech company, and there are no winners yet. I expect that Meta's execs will come out fighting on the call, with lots of datapoints about the impact of AI on ad performance and user engagement, and lots of talk about the power of the Lllama 3 model.
