Meta (Meta Platforms Inc., or META) experienced a 15% decrease in after-hours trading following the company’s announcement that it plans to significantly increase investments in artificial intelligence and keep its metaverse division operating at a loss, despite a disappointing revenue forecast.
In the giant company’s Q1 2024 financial report announced on April 24, 2024, they forecasted a rise in expenses to between $96 billion and $99 billion. This is an increase from their previous estimate of $94 billion to $99 billion. The cause for this increase includes elevated infrastructure and legal costs.
The company raised its estimated capital expenditures for the entire year of 2024 to a maximum of $40 billion, up from the previous projection of $37 billion, with plans to invest heavily in advanced AI research and product development.
In Q1, Meta’s Reality Labs division, responsible for metaverse development, reported a loss of $3.85 billion. This is a decrease from the nearly $4 billion lost in the same quarter the previous year. However, Meta anticipates these losses to grow annually to finance the ongoing product development within this division.
After the market closed on April 24, Meta’s stock price dropped by 15.4%, or $176.28, reaching $417.22, based on data from Google Finance. Earlier in the day, the stock had decreased by 0.5% to $493.50.
Despite a recent peak of $527.34 on April 5, Meta’s stock remains 42.5% higher than its starting price for the year.
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2024-04-25 02:38