Meta’s sales forecast falls short of market expectations – stock price plummets – Bloomberg

Facebook parent company US On the 24th, Meta Platforms revised its full-year spending forecast upward. The company’s sales forecast for the April-June period (second quarter) was lower than Wall Street’s expectations. It once again raised doubts whether bets on futuristic technology would ultimately pay off for investors.

Meta’s sales for the January-March period (first quarter) increased by over 27% from the same period last year to $36.5 billion (approximately 5.67 trillion yen). The average analyst estimate compiled by Bloomberg was $36.1 billion. Profits more than doubled to $12.4 billion, with earnings per share of $4.71.

Meanwhile, the company forecast sales for the April-June period of $36.5 billion to $39 billion, falling short of the median analyst estimate of $38.2 billion. The company has raised its full-year expense forecast, expecting capital expenditures of $35 billion to $40 billion. The company had estimated costs related to servers, artificial intelligence (AI) hardware and data centers to be between $30 billion and $37 billion this year.

“We are investing aggressively to support our ambitious AI research and product development, and we expect capital spending to continue to increase next year,” Chief Financial Officer Susan Lee said in a statement.

Meta’s stock price suddenly plunged 11% in after-hours trading on the U.S. stock market on the 24th. The stock price has risen 39% so far this year at the close of regular trading, and has been trading near its highest price since going public over the past month, driven by the AI ​​boom.

Meta is making aggressive investments to compete with competitors such as Microsoft and Alphabet in AI. The company announced plans for an $800 million new data center in January. It also independently develops chips for AI services. The company is also working on a new version of its large-scale language model, LLaMA, to power chatbots and other AI services.

CEO Mark Zuckerberg has spent years pouring money into efforts to build a metaverse. Seeking to placate investors unhappy with the company’s aggressive spending on technology that hasn’t yet borne fruit, Zuckerberg last quarter announced the company’s first quarterly dividend and a $50 billion stock buyback plan.

Meta’s Reality Lab division, which focuses on futuristic bets, posted a loss of $3.85 billion in the first quarter, about the same as a year earlier. The division, which also makes virtual reality (VR) headsets and smart glasses, had reported losses of more than $16 billion in 2023.

Original title: Meta Projects Higher Spending, Weaker Revenue Amid AI Push (1) (excerpt)

(Updated by adding profits, CFO comments, etc.)