TLDR:
- Meta reported weak revenue forecasts as it plans to invest more in AI.
- Mark Zuckerberg focuses on getting more users to use Meta AI rather than generating immediate revenue.
Meta’s drive to integrate AI into its products resulted in strong financial results for two consecutive quarters. The company plans to increase its investment in AI going forward, which led to a share price drop of more than 15%. Zuckerberg emphasized the importance of expanding the user base for Meta AI over immediate revenue generation, drawing parallels to previous successful ventures like Instagram Reels. Revenue increased by 27% to $36.46bn in the first quarter, surpassing analyst expectations. However, a weak sales forecast for the next quarter caused concern among shareholders.
Meta’s capital expenditure is expected to increase to between $30bn and $40bn, as the company focuses on AI initiatives. Zuckerberg’s shift from metaverse investments to AI has been well-received by investors, with shares rising by nearly 40% this year. Despite positive financial results, regulatory challenges, particularly related to child safety and mental health, loom over the company.