Meta Platforms’ disappointing second-quarter revenue forecast has raised concerns about the impact of new AI tools on business growth. Meta’s stock price tumbled by 10% in extended trading on Wednesday, shedding $125 billion in market value. The company now anticipates revenue between $36.5 billion and $39 billion for the April-June period, falling below analysts’ estimates of $38.3 billion. Meta cited limited revenue growth from AI tools and increased expenses for supporting these investments as reasons for the downward revision. Additionally, Meta increased its forecasted expenses for the year to $96 billion-$99 billion, primarily due to investments in AI products and related infrastructure. This represents an upward adjustment from the previous estimate of $94 billion to $99 billion. Meta’s first-quarter revenue reached $36.5 billion, generally meeting expectations. However, the company’s daily active people growth rate slowed to 7% from 8% in the previous quarter. Notably, Meta now only discloses the daily active people figure for user growth, discontinuing the practice of providing separate figures for individual platforms like Facebook. The company’s revenue growth strategy involves incorporating AI tools and short video formats into its ad products. Meta also introduced AI features such as a chat assistant to enhance user engagement. Furthermore, Meta benefits from regulatory pressure faced by its Chinese-owned competitor TikTok, which faces potential U.S. restrictions.
Meta’s Q2 Revenue Forecast Falls Short of Expectations, Shares Drop
