SAN FRANCISCO: Facebook owner Mehta said Wednesday that the company's quarterly profit soared last quarter, but concerns about the cost of artificial intelligence drove down the company's stock price on Wall Street.
The company founded by Mark Zuckerberg said its net profit rose to $12.4 billion in the January-March period, with total revenue, mostly from advertising sales, up 27% to $36.5 billion.
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“We estimate that more than 3.2 billion people use at least one of our apps every day, and we expect healthy growth in the U.S.,” CEO Zuckerberg said on an investor call. “We can see it,” he told analysts.
Sonata Insights analyst Debra Williamson said Meta's growth is particularly due to its sophisticated advertising tools and “Reels,” short, algorithmically scrolling videos copied from TikTok. This is due to the success of
In a potential further boost to the company's business, Meta could also start selling ads on Threads, a text messaging platform similar to X (formerly Twitter), by the end of the year.
With ads on Threads, “advertisers looking to reach audiences in real-time moments finally have a viable alternative to X,” said Mike Proulx, vice president at Forrester. says Mr.
Increased sales and profits continued Meta's recovery in 2023. This was thanks to significant cost cuts, including massive layoffs during what Zuckerberg called the “year of efficiency,” which saw him lay off tens of thousands of employees after a disastrous 2022. .
Meta said its global workforce now stands at 69,329, up slightly from last quarter but down from its peak of more than 87,000 in 2022.
'A few years'
The company ended last year with record profits, and the stock has since soared on Wall Street, thanks in particular to enthusiasm for AI, with the company's stock price nearly tripling last year and another 40% in 2024. %Rose.
But Meta's stock price fell nearly 17% in after-hours trading on Wednesday, as investors worried about signs that spending was creeping up.
Due to the investment in AI, Meta said it expects full-year capital spending in 2024 to be in the range of $35 billion to $40 billion, up from $30 billion to $37 billion previously.
Zuckerberg urged investors to be patient as his company expands into AI, acknowledging that “historically our stock price has fluctuated wildly” by introducing new products before they are profitable. I called out.
“Building cutting-edge AI will be a larger undertaking than any other experience we've added to the app, and it will likely take several years,” he added.
Last week, Zuckerberg announced the latest version of Meta AI, which is now being rolled out as an enhanced smart assistant across the company's apps, including Instagram, WhatsApp, Messenger, and Facebook.
Meta's latest technology is deployed in more than a dozen English-speaking countries, including Australia, Canada, Singapore, and the United States.
This AI is powered by LLaMA 3, the company's most powerful large-scale language model, and is available as an open source product for developers to create their own tools.
Big tech companies are in a race to become leaders in AI, and Microsoft is seen as a front-runner thanks to its partnership with OpenAI, the developer of ChatGPT.
AI is fueling Microsoft's core cloud computing business, a service that Meta does not offer, raising further concerns that the technology will be more expensive to deploy for the company. Masu.
For the Metaverse, which Mr. Zuckerberg describes as the future of the internet (mixing the real and virtual worlds via high-tech glasses and headsets), the group's specialized arm once again earned $3.8 billion, albeit less than expected. recorded a significant loss. .
Zuckerberg said the partnership with Ray-Ban to make VR glasses is “going very well” and the company remains confident about the future of the field.
