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Amid intensifying concerns that a global trade war will sink the digital advertising market, Meta Platforms (META) released the first two models in its Llama 4 herd -- Scout and Maverick -- and is also reportedly planning a new $1.0 bln data center project in Wisconsin. META's aggressive AI investments have catapulted the company to the front of the pack within the digital advertising space, as illustrated by robust Q4 yr/yr revenue growth of 21%, driven by new AI-powered tools that improve ad targeting and generate stronger ROI for advertisers.

While investors are increasingly scrutinizing tech companies' massive AI spending plans, especially as economic growth concerns escalate, META has earned the benefit of the doubt, proving that its AI products are providing it with a competitive edge. Therefore, the company's launch of Llama 4 Scout and Llama 4 Maverick is creating some hope that its superior tech can help to offset the fierce macro-related headwinds.

• Scout and Maverick, which are now powering Meta AI in WhatsApp, Messenger, and Instagram Direct, offer advancements from META's past Llama models in a variety of ways. For instance, these models provide higher performance in image and text understanding, enabling more precise visual question answering. Additionally, Llama Herd models are customizable, meaning that developers can train the model to suit specific needs or tasks within particular industries, languages, or types of data.
• Llama Herd models can also process data faster and more effectively than previous models, and like past models, it's available as an open-source project. As a result, developers can access the model's code, use it, modify it and improve upon it.
• Despite the tumultuous environment, there are no signs that META is planning to slow its ambitious spending plans. When META posted upside Q4 results in late January, it reiterated its FY25 capex guidance of $60-65 bln, representing a yr/yr increase of nearly 60%. After the close on Friday, Bloomberg reported that META is planning to spend about $1.0 bln to construct a new data center project in Wisconsin, putting those spending plans back under the spotlight.
• This news comes after the company announced a $10.0 bln data center project in Louisiana last December, which is expected to open in 2030. With these AI infrastructure investments, META is positioning itself to maintain or improve upon its solid competitive position, but if its growth takes a major hit as tariffs take effect, it will have a more difficult time justifying these huge cash outlays to investors,

In the long-term, META's launch of the Llama 4 Herd AI model and its new data center project in Wisconsin will drive revenue growth through enhanced AI capabilities, but tariff-related pressures are likely to weigh on the company's profitability on a shorter-term basis.