META: Meta Stock Tumbles as Zuck Flexes Strong Earnings but Projects Rising Costs

Social media giant posted a huge profit of $15.7 billion but bumped up expected costs as it seeks to corner the AI market.

• Meta stock META floated under the flatline during Thursday’s trading session after the social media titan released earnings Wednesday after the bell. It was a solid quarter for Meta. The company earned $6.03 a share against expectations of $5.20 and pulled in revenue of $40.59 billion, up 19% from the year-ago quarter and surpassing analysts’ estimates for $40.29 billion. Net income? That one jumped 35% year-over-year to a hefty $15.7 billion.
• Meta CEO Mark Zuckerberg praised the results and — as any other tech boss during earnings season — couldn’t emphasize enough on how important AI is for future growth. “We had a good quarter driven by AI progress across our apps and business,” the recently cool tech bro said in a statement. “Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too.” And that’s what toppled shares.
• Rising AI expenses weighed on the stock as investors worried that too much spending on AI won’t convert to profits any time soon. Meta raised capital expenditures guidance for the 2024 fiscal year to the range of $38 billion to $40 billion, up from $37 billion to $40 billion. Looking ahead, more of that is coming in 2025 — Zuck projects spending to grow significantly next year as the company builds out the infrastructure layer for artificial intelligence.