Meta plunges nearly 15% after Mark Zuckerbergs firm forecasts higher expenses from aggressively investing in AI
Meta plunged nearly 15% Thursday after the Facebook-parent forecast higher expenses over its plans to “invest aggressively” in artificial intelligence.The Mark Zuckerberg-led tech giant’s stock was down 13.5%, at $427 at 11:30 am ET — threatening to wipe roughly $200 billion in market cap.Zuckerberg’s net worth also took a massive hit, wiping out about $730 million and dropping him below archrival Elon Musk on the Bloomberg Billionaire Index.The 39-year-old boss — who received a mere $1 salary from Meta in 2023 — has a fortune estimated at $175 billion, most of which is tied to his 13% stake in Meta, to trail Musk by a few billion dollars.Investors appear to be losing patience with Zuckerberg’s prodigious artificial intelligence investment after the company signaled deeper spending and a long road to profitability while reporting lighter-than-expected revenue late Wednesday.Meta said Wednesday that it would increase its investment in AI projects by as much as $5 billion and also raised its full-year capital expenditures to $35 billion to $40 billion, up from $30 billion to $37 billion.“We expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” the company said after reporting earnings.Zuckerberg told analysts on a conference call that the focus on AI would “grow our investment envelope meaningfully before we make much revenue from some of these new products.”“On the upside, once our new AI services reach scale, we have a strong track record of monetizing them effectively,” he added.His comments and the quarterly results tempered expectations for Meta’s AI investments after a series of smash-hit quarters for the social media giant. Meta enjoyed the biggest one-day gain in market capitalization in Wall Street history after its last quarterly report, when it posted robust results and announced a first-ever dividend.
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