1 month ago
Meta Shares Drop as CEO Defends AI Spending
Meta, the company that owns Facebook and Instagram, said it will spend a lot of money on artificial intelligence.
Some investors were worried that this spending might not make money soon, so the stock fell more than 10%.
The CEO, Mark Zuckerberg, said the AI work is a big deal and will help the company in the long run.
Meta also plans to build big computer centers in Texas and Louisiana and might sell extra computer power to other companies.
The company expects to spend $130‑$145 billion on AI this year, and its free cash flow was the lowest in years.
Meta shares fell over 10% after a weaker-than-expected Q3 revenue forecast and concerns over its $145bn AI spending plan.
CEO Mark Zuckerberg defended the AI push, saying it will be a "big thing" and could eventually generate long‑term shareholder value.
Meta projected Q3 revenue of $61‑$64bn, below analysts' $63.2bn average estimate, and reported its lowest free cash flow in years.
The company plans to build AI data centers in El Paso, Texas and rural Louisiana, and may sell excess compute capacity to other firms.
Meta's full‑year capital expenditure forecast was raised to $130‑$145bn, with legal penalties adding $2.4bn to expenses.
- Who
- Meta Platforms, Inc. and its CEO Mark Zuckerberg
- What
- Meta's earnings call and AI investment strategy
- Where
- Meta's earnings call
- When
- Wednesday, Q3 2024 earnings call
- Why
- Investors concerned about AI spending and revenue forecast; CEO defends AI strategy
Key facts
- Company
- Meta Platforms, Inc.
- CEO
- Mark Zuckerberg
- Q3 Revenue Forecast
- $61‑$64bn
- Full-year CapEx
- $130‑$145bn
- Free Cash Flow Q2
- $784 million
- AI Data Centers
- El Paso, Texas and Louisiana
- Investor Sentiment
- Negative due to AI spending concerns
Quotes
Mark Zuckerberg
Chief Executive Officer of Meta (formerly Facebook)
“"My personal bet is that the people who invest in this are going to be rewarded and feel very good over time."”
livemint.com
“"I get that this is a big investment and it's a big bet."”
livemint.com
Sources
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