The CEO of Meta Platforms, Inc., Mark Zuckerberg, made a significant announcement during the company's first-quarter financial results about increasing investments in artificial intelligence. This decision to scale up capital expenditure and energy costs for AI caused a steep decline in the company's stock value, with the shares plunging by 17% following the disclosure. Gene Munster, the co-founder and managing partner of Deepwater Asset Management, noted that Zuckerberg's goal is to bring investors on board for a prolonged investment period in AI, emphasizing that the market's reaction to the announcement is exaggerated.
Despite the stock drop, Meta's first-quarter financial results were impressive, surpassing expectations with a revenue of $36.45 billion, marking a 27% year-over-year increase. In the previous quarter, Meta surprised investors with better-than-expected results, introduction of a quarterly dividend, and a $50 billion expansion to its buyback program. Looking ahead, Meta aims to reinforce its operational efficiency and advertising performance while advancing its long-term goals in AI and Reality Labs, as articulated by the tech giant during the recent financial update.
The decline in Meta's stock price continued after the market closed, with shares falling by 15.1% to $418.85 in after-hours trading following a 0.52% decrease in the regular session, closing at $493.5, as reported by Benzinga Pro. Mark Zuckerberg's emphasis on AI investments and future plans for Meta sheds light on the company's strategic focus and long-term vision, amid the market's reaction to the announcement.