Meta (META) shares dip 15% in after-hours trading as plans to boost AI spending and sustained metaverse losses coincide with a dim revenue outlook.
In after-hours trading, Meta (META) shares fell 15% following the company’s announcement that it will “substantially” increase expenditure on artificial intelligence. At the same time, its metaverse division will continue to operate at a loss due to a bleak revenue outlook.
In its results report for the first quarter of 2024, released on April 24th, the multinational corporation projected an increase in expenses from $94 billion to $99 billion to a range of $96 billion to $99 billion, citing “higher infrastructure and legal costs.”
Additionally, the company increased its full-year 2024 capital expenditures from $37 billion to a maximum of $40 billion, stating that it would “invest aggressively to support our ambitious AI research and product development.”
Its Reality Labs, which is developing the metaverse, incurred a loss of $3.85 billion in the first quarter, a decrease from the nearly $4 billion it lost in the first quarter of 2023. However, Meta anticipated these losses would increase annually to fund the division’s product development.
According to Google Finance, Meta shares fell 15.4% after-hours on April 24 to $417.22, after concluding the day down 0.5% at $493.50. Despite this, Meta is up 42.5% year-to-date following its all-time peak of $527.34 on April 5.
