Meta shares plunged on Wednesday after the US tech giant revealed plans to increase spending on artificial intelligence (AI) technology.
More than $150bn (£120bn) has been wiped from Facebook's parent company's market value following the latest financial results covering the first three months of this year.
The business's shares fell as much as 13% in after-hours trading in New York, in a sign that investors may be cooling down on Meta's commitment to making big investments in AI.
The decline came even though Meta's first-quarter profit more than doubled compared to the same period last year, posting a 117% increase in net income of $12.4 billion.
This followed Meta's plan to cut costs in 2023 by cutting more than 21,000 jobs.
The Facebook and Instagram operator reported revenue of $36.5 billion, up 27% from the same period in 2023, as digital advertising rebounds.
But the company said it plans to invest more than expected in AI technology and the so-called “metaverse,” increasing its estimated capital expenditures from $30 billion to $37 billion to as much as $40 billion.
The company said it expects total costs to reach $99 billion this year and that losses at Reality Lab, which is based on speculative efforts to develop Metaverse hardware and apps, will continue to rise. Ta.
The drop in the company's stock price comes even as social media rival TikTok faces the prospect of a ban in the United States.
“We expect capital expenditures to continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” Mehta said.
Zuckerberg vowed in January to take on rivals such as Google Deepmind and OpenAI, the developer of ChatGPT.
To do so, Meta currently plans to purchase 350,000 powerful AI processors.
The stock's recent decline comes after Facebook's owner's valuation has risen more than 40% so far this year, with Zuckerberg's net worth surpassing that of rival Elon Musk.
Zuckerberg said the results followed a “strong quarter” for the company and marked “another step toward building the world's leading AI.”
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