- Meta's stock price fell about 16% after hours, despite better-than-expected first-quarter results.
- The company reported lackluster revenue forecasts along with significant investments in AI.
- Mark Zuckerberg told investors Wednesday that it will take time to make money from AI.
Despite posting record profits in the first quarter, Meta's stock was mired on Wednesday as the company ramped up its spending on AI.
Meta reported first-quarter revenue of $36.46 billion, up 27% year-over-year and beating analyst expectations.
However, Meta's stock price fell about 16% after the close of trading on Wednesday following the company's first-quarter results.
Meta, the parent company of Facebook, Instagram and WhatsApp, predicted second-quarter revenue would fall in the range of $36.5 billion to $39 billion. Analysts expect the company's sales to be close to $38.24 billion.
The second aspect of the meta report clouding first-quarter earnings results is the company's huge investment in AI, which CEO Mark Zuckerberg said the company needs to see big gains. He said that.
Meta expects capital expenditures to be in the range of $35 billion to $40 billion in 2024 as it continues to invest in infrastructure for artificial intelligence, down from the expected $30 billion to $370 billion. He said it was more than $1 billion.
Zuckerberg told shareholders on Wednesday's earnings call that the volatility in Meta's stock price is to be expected when the company is working on new projects and features that don't immediately generate revenue. Ta. Zuckerberg said Meta's AI investments are similar, but he cautioned that it will take time to see the benefits of artificial intelligence.
“Historically, investing in building these new scale experiences in our apps has been a very good long-term investment for us and for the investors who support us. And the initial signs here are very positive,” he said. “But building cutting-edge AI will be a larger-scale undertaking than any other experience we add to the app, and once our new AI service reaches scale, this It could take years to turn around.”
Ahead of its first quarter earnings release, Meta announced the latest version of its chatbot, Llama 3. This powers Meta AI, the company's new AI assistant.
Zuckerberg said the AI assistant will be integrated into many of Meta's products, including Instagram and Facebook.
Meta said Llama 3 is the “most capable” open source model out there, but as Business Insider's Hasan Chowdhury reported, the tool is still an OpenAI language model released last year. ChatGPT does not exceed 4.
A Meta spokesperson declined to comment.
