Mark Zuckerberg’s Meta suffered a significant hit to its stock price in extended trading on Wednesday, despite better-than-expected profit and revenue for the first quarter, as Zuckerberg focused on the company’s long-term investments in AI and the metaverse during the earnings call. The stock is now down more than 15.7 percent in Thursday pre-market trading.
CNBC reports that during Meta’s quarterly earnings call on Wednesday, CEO Mark Zuckerberg shifted the focus away from the company’s core digital advertising business, which generates 98 percent of its revenue, to discuss the potential of artificial intelligence and the metaverse. This move unnerved investors, causing Meta’s shares to tumble as much as 19 percent in extended trading, wiping out more than $200 billion in market value. Shares are down more than 15 percent in pre-market trading on Thursday.
Mark Zuckerberg Meta Selfie (Facebook)
Mark Zuckerberg, chief executive officer and founder of Facebook Inc., demonstrates an Oculus Rift virtual reality (VR) headset and Oculus Touch controllers. Photographer: David Paul Morris/Bloomberg via Getty Images
Zuckerberg acknowledged the volatility in Meta’s stock price during this phase of the company’s product playbook, where it is investing in scaling new products without immediate monetization. He cited past efforts like Reels, Stories, and the transition to mobile as examples of this pattern.
The Meta CEO highlighted the company’s efforts in building a “leading AI,” discussing Meta Llama 3, their newest large language model, and the recent rollout of Meta AI, a competitor to OpenAI’s ChatGPT. He also touched on potential opportunities for expansion within the mixed reality headset market, such as headsets for work or fitness, and the opening of the Quest headsets’ operating system to accelerate the growth of the mixed reality ecosystem.
However, Meta’s Reality Labs unit, responsible for the development of the metaverse, continues to hemorrhage cash. The division reported sales of $440 million for the first quarter and losses of $3.85 billion, bringing its cumulative losses since the end of 2020 to an astounding $45 billion.
Zuckerberg stated that Meta will continue to operate efficiently while shifting existing resources to investments in AI, which will “grow our investment envelope meaningfully.” The company expects capital expenditures for 2024 to be in the $35 billion to $40 billion range, an increase from the prior forecast of $30 billion to $37 billion.
Read more at CNBC here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship.
