Quick overview

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Meta shares fell the most in six months after the company increased its spending outlook for the year, rekindling concerns that Chief Executive Officer Mark Zuckerberg’s historic levels of investment to catch up in the artificial intelligence race won’t pay off.

 

The social media behemoth predicted full-year capital expenditures of $125 billion to $145 billion, surpassing analysts’ projections and representing roughly a 7.4% increase over the company’s January projections.

Chief Financial Officer Susan Li stated on a call with investors on Wednesday that Meta is dealing with “higher component pricing” and additional data center costs, while maintaining its conviction that its AI strategy is working.

Zuckerberg stated that his company would invest hundreds of billions of dollars in AI infrastructure by the end of the decade, before a shortage of memory chips drove up costs. Meta has announced deals worth billions of dollars.

Wall Street had predicted $55.51 billion in first-quarter sales, but Meta reported $56.3 billion. Sales for the current quarter were estimated between $58 billion and $61 billion, which is about in line with expectations. The number of daily active users on all of Meta’s social media platforms decreased slightly to 3.56 billion in the first quarter.

The business mentioned Russia’s limitations on WhatsApp access and internet outages in Iran. Since the company started using that metric, that was the first decline.