Meta Platforms’ share price plummeted 15% in extended trading after the company released disappointing forecasts indicating higher expenses and lower-than-anticipated revenue. This represents Meta’s second-largest single-day stock value loss, following the record-breaking $232 billion loss suffered on February 3, 2022, which marked the highest one-day loss of market capitalization for any U.S. company. Meta, the parent company of Facebook and Instagram, anticipates April-June revenue within a range of $36.5 billion-$39 billion, with a midpoint of $37.8 billion, falling short of analysts’ estimates of $38.3 billion. The company has revised its expense projection for the year upwards to support investments in novel AI products and the essential computing infrastructure. Meta has stated that the anticipated spending will continue to increase in the following year. The company raised its total expense forecast for 2024 to $96 billion-$99 billion, up from the previous range of $94 billion-$99 billion. It also predicts capital expenditures for 2024 to fall within a range of $30 billion-$40 billion, exceeding the earlier estimate of $35 billion-$37 billion. During its conference call, Meta CEO Mark Zuckerberg informed analysts that the company’s focus on AI would “grow our investment envelope meaningfully before we make much revenue from some of these new products.” Meta Q1 Results Meta reported a revenue increase of 27% to $36.5 billion in the first quarter ended March 2024, up from $28.65 billion in the same period the previous year, roughly in line with expectations of $36.2 billion. The company’s profit more than doubled for the January-March period, with earnings reaching $12.37 billion ($4.71 per share), significantly higher than the $5.71 billion ($2.20 per share) reported in the same period last year. Meta’s daily active users (DAP), a metric used to track unique users of any of the company’s apps (Facebook, Instagram, Messenger, or WhatsApp) within a day, grew by 7%, compared to the 8% growth in the preceding quarter. The company provided revenue guidance for the current quarter, anticipating a range of $36.5-$39 billion, exceeding analyst expectations of $38.25 billion for the second quarter.
Meta Shares Plunge After Disappointing Forecast
