Meta Platforms reported revenue of $36.5 billion for the first quarter, exceeding analysts’ expectations but raising concerns about its spending and future growth prospects.
The company’s profit more than doubled to $12.37 billion, but its shares tumbled in after-hours trading after it projected lower-than-expected revenue for the second quarter and raised its cost guidance for the year.
Meta has been aggressively investing in AI, data centers, and other infrastructure to compete with rivals like Microsoft and Google. Its Reality Labs division, focused on the Metaverse, reported a loss of $3.85 billion for the quarter.
Despite the mixed results, Meta reiterated its plans to spend heavily in 2024, citing its ambitious AI and virtual reality initiatives. The company’s stock has performed well this year, buoyed by excitement around AI but concerns remain about the profitability of its long-term bets.
Meta’s challenges come as President Joe Biden signed a bill requiring TikTok’s parent company to sell or face a ban in the US. This could potentially benefit Meta’s Reels, a TikTok clone, but the company faces ongoing competition in the short-video market.
Overall, Meta Platforms is navigating a complex landscape of high spending, uncertain future growth, and regulatory challenges as it pursues its ambitious technological vision.
