{"id":2533,"date":"2024-04-25T15:35:05","date_gmt":"2024-04-25T15:35:05","guid":{"rendered":"https:\/\/dailywashingtoninsider.com\/index.php\/2024\/04\/25\/meta-shares-take-125bn-hit-as-facebook-owner-raises-spending-forecasts\/"},"modified":"2024-04-25T15:35:05","modified_gmt":"2024-04-25T15:35:05","slug":"meta-shares-take-125bn-hit-as-facebook-owner-raises-spending-forecasts","status":"publish","type":"post","link":"https:\/\/dailywashingtoninsider.com\/index.php\/2024\/04\/25\/meta-shares-take-125bn-hit-as-facebook-owner-raises-spending-forecasts\/","title":{"rendered":"Meta shares take $125bn hit as Facebook owner raises spending forecasts"},"content":{"rendered":"
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Shares in Meta, the owner of Facebook, WhatsApp and Instagram, have fallen sharply after the company revealed it had raised its cost forecast for the current year.<\/p>\n

Investors sent the stock 10% lower in after-hours trading in New York when Meta<\/strong>‘s first-quarter results showed further bills were expected to fund new artificial intelligence (AI) products and the infrastructure behind them.<\/p>\n

<\/div>\n

The company, founded and run by Mark Zuckerberg, said it now forecast 2024 capital expenditure in the range of $35bn-$40bn.<\/p>\n

That was up from a previous range of $30bn-$37bn.<\/p>\n

It also raised its total expenses forecast to $96bn-$99bn – a rise of $2bn in the low-range mark.<\/p>\n

<\/div>\n

The shifts, while hardly huge in scale, nevertheless threaten to reopen old wounds following a 2022 row with investors over Zuckerberg’s bets on technology.<\/p>\n

Meta has been updating its ad-buying products with AI tools and short video formats to boost revenue growth, while also introducing AI features like a chat assistant to drive engagement on its social media properties.<\/p>\n

The other main key metrics reported by the company beat financial market expectations, according to LSEG data.<\/p>\n

Total revenue rose 27% to $36.5bn and Meta forecast a slight improvement in the current March-June quarter.<\/p>\n

However, its low-range sum came in below market forecasts and analysts said that the company’s view had contributed to the share price sell-off.<\/p>\n

A 10% reduction in the share price equated to lost market value of $125bn (\u00a3100.3bn) they said, as the values continued to fluctuate.<\/p>\n

The stock remains around 30% up on the year to date.<\/p>\n

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said of the reaction: “Meta’s substantial investment in AI has the ability to hugely improve engagement with its platforms, and therefore the amount marketers are prepared to pay for ad space.<\/p>\n

“The group has indeed surpassed expectations in a time when digital advertising uncertainty remains rife.<\/p>\n

“Over 50 countries are due… elections this year, which hugely increases uncertainty, and digital spending tends to move down when risks increase.<\/p>\n

“This speaks to Meta’s enormous scale and importance to modern-day marketers. Its fortunes are probably also being bolstered by TikTok’s uncertain future in the US<\/strong>. One potential outcome from all this turmoil could well see TikTok added to the Meta family.”<\/p>\n

She added: “For all Meta’s bold AI plans, it can’t afford to take its eye off the nucleus of the business – its core advertising activities.<\/p>\n

“That doesn’t mean ignoring AI, but it does mean that spending needs to be targeted and in-line with a clear strategic view.”<\/p>\n<\/p>\n

This post appeared first on sky.com<\/div>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

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