Expectations were so high that even spectacular results have disappointed the market. While Tesla soared on the stock market after poor results, Meta fell sharply after growing both in revenue and profits, partly due to forecasts of higher expenses and investments. The turnover of the company founded and directed by Mark Zuckerberg soared by 27% in the first quarter, to 36,455 million dollars (about 34,100 million euros, at the current exchange rate). Profit more than doubled, with an increase of 117%, up to 12,369 million. Despite this, meta is trading lower in operations after normal market hours.
“It's been a good start to the year,” said Mark Zuckerberg, through a statement. “The new version of Meta AI with Llama 3 is another step towards building the world's leading AI. “We are seeing healthy growth across our apps and continue to make steady progress building the metaverse as well,” he added.
The company that owns Facebook, Instagram and WhatsApp expects revenue for the second quarter of 2024 to be between $36.5 billion and $39 billion. Analysts expected 38.2 billion, so the midpoint of the forecast range is somewhat below what the market expected.
Analysts and investors also did not like that Meta has raised its forecasts for total expenses and investments for the whole of 2024. It previously expected that total expenses would be between 94,000 and 99,000 million dollars and now it says that they will be between 96,000 and the 99,000 million, “due to the increase in legal and infrastructure costs.”
Regarding investments, it is expected that they will be between 35,000 and 40,000 million dollars, compared to the previous 30,000-37,000 million dollars. “We continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap,” the company justifies. “While we do not provide guidance for the years beyond 2024, we expect investments to continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” he added.
Meta has been investing aggressively to compete in artificial intelligence and stand up to other tech giants like Microsoft and Alphabet. The company announced plans for a new $800 million data center in January and is also developing its own chips for artificial intelligence services. Meta is also working on several new iterations of its large language model, known as Llama, to power chatbots and other AI services.
As for Reality Labs, which encompasses its so-far ruinous bet on the metaverse, Meta continues to expect operating losses to increase significantly year-over-year due to ongoing product development efforts and investments to continue expanding our ecosystem. That raises questions about whether his futuristic technology bets will end up paying off for investors.
The company includes another additional warning: “We continue to monitor an active regulatory landscape, including increasing legal and regulatory headwinds in the EU and the United States that could materially impact our business and financial results.”
Meta shares have fallen by more than 12.5% in after-hours trading. Not counting that fall, the company's share price has appreciated more than 40% so far this year and 138% in the last 12 months. With the presentation of the fourth quarter results from 2023, Meta set a historical record by revaluating 204.5 billion dollars in a single session, although that mark was later broken by Nvidia.
Stocks Soared not only because of the good results, but also because Zuckerberg announced a share buyback worth $50 billion, in addition to the first quarterly dividend in the company's history. Investors also applauded the achievements in austerity that now seem to be fading.
[Noticia de última hora. Habrá ampliación en breve]
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