Meta Shares Plunge 7% on User Growth Miss, Higher AI Spending Outlook
Summary
Meta Platforms' shares fell up to 7% in after-hours trading following its first-quarter results. Despite reporting revenue of $56.31 billion and diluted EPS of $7.31, both surpassing analyst estimates, the market reacted negatively to a miss on Daily Active People (DAP) growth, which was 5% lower than the previous quarter and below expectations. Additionally, the company increased its capital expenditure guidance for AI programs to $125 billion-$145 billion, up from $115 billion-$135 billion. This market reaction, focusing on user growth concerns and increased spending, indicates investor apprehension about future profitability and the return on investment for Meta's aggressive AI initiatives. Traders will be closely watching future user growth trends and the tangible benefits derived from these substantial AI investments.
At the time of this announcement, META was trading at $625.97 on NASDAQ in the Technology sector, with a market capitalization of approximately $1.7T. The 52-week trading range was $520.26 to $796.25. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: CNBC TV18.