Meta Shares Plunge as CFO Outlines Long-Term AI Investments
Meta's stock prices fell 11% following reports of continued heavy investments in AI beyond 2028, raising concerns among investors about the company’s competitiveness against global tech giants. The increase in compute power is viewed with skepticism as Meta seeks to solidify its position in the technological landscape.
Technology giant Meta is experiencing a sharp market reaction following financial reports that indicate the company plans to continue heavy investments in artificial intelligence (AI) well into 2028 and beyond. CFO Susan Li's statement about the long-term strategy focusing on continuous compute expansion has raised doubts among investors regarding Meta's ability to compete with global AI leaders like Google and Anthropic. CEO Mark Zuckerberg is banking on personal agents, but these projections have been met with skepticism by market participants, considering the recent setbacks in Meta’s metaverse initiatives. While revenues rose 28% in the quarter due to a 14% increase in ad impressions and a 12% rise in average advertising prices, much of this profitability has been redirected towards R&D investments, with capital expenditures reaching US$31.1 billion, up from US$17 billion the previous year. Free cash flow plummeted to just US$784 million, highlighting the impact of these significant AI-related expenditures.
Source: ForexLive (InvestingLive)