Shares of Meta plunged on Wednesday after the US tech giant revealed plans to increase spending on artificial intelligence (AI) technology.
More than $150 billion (£120 billion) was wiped from parent company Facebook’s market value following the latest results, which covered the first three months of the year.
In a sign that investors may be cooling off over Meta’s pledge to invest huge sums in AI, the company’s shares fell as much as 13% after hours in New York.
The decline came despite Meta’s first-quarter profits more than doubling from the same period last year, up 117% after posting a net profit of $12.4 billion. dollars.
This followed Meta wants to reduce its costs in 2023 by eliminating more than 21,000 jobs.
The Facebook and Instagram operator also reported revenue of $36.5 billion, up 27% from the same period in 2023, driven by a recovery in digital advertising.
However, the company indicated that it plans to invest more than expected in AI technology and the so-called “metaverse”increasing its capital expenditures estimated between $30 billion and $37 billion, up to $40 billion.
The company said it expected its overall costs to rise to $99 billion this year and said losses at its “reality labs,” which house its speculative efforts to build hardware and metaverse applications, would continue to increase.
The fall in its share price occurred despite its social media rival TikTok. facing the prospect of a ban in the United States.
Meta said: “We expect capital expenditures to continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts. »
In January, Mr. Zuckerberg pledged to challenge rivals including Google Deepmind and OpenAIthe developer of ChatGPT.
To do this, Meta is currently planning to purchase 350,000 powerful AI processors.
The latest setback in its stock price comes after the Facebook owner’s valuation soared more than 40% so far this year, pushing Mr. Zuckerberg’s net worth above that of his rival Elon Musk.
Mr. Zuckerberg said the latest results followed a “good quarter” for the company, which took “another step toward building the world leader in AI.”
