- Meta reported a 27% increase in revenue and profit more than doubled in the first quarter of 2024.
- The company plans to spend billions of dollars more than expected on infrastructure to support its artificial intelligence efforts.
- Meta’s shares fell more than 11% in after-hours trading after announcing the increased spending on AI infrastructure.
Meta, the owner of Facebook, Instagram, and WhatsApp, reported strong financial results in its latest earnings release, even as it ramps up investment in artificial intelligence (AI) capabilities.
Revenue and Profits Jump
The company’s revenue rose 27% year-over-year to $36.5 billion, slightly exceeding analyst estimates. Net income more than doubled to $12.4 billion.
“It’s been a good start to the year,” said Mark Zuckerberg, Meta’s CEO.
AI Investments Drive Increased Spending
Meta plans to spend $35-40 billion this year, up from its prior estimate of $30-37 billion. The increased spending will go towards AI infrastructure, including data centers, chip designs, and research and development.
The ramped up investments in AI reflect Meta’s strategy of positioning itself at the forefront of artificial intelligence advancements. AI has seen growing interest lately, especially generative AI that can produce content like text, images, and video.
Share Price Drops on Higher Spending Outlook
Meta’s shares fell over 11% in after-hours trading following the earnings release and outlook for higher spending. The stock closed the regular trading session at $493.50.
The Road Ahead
Meta is betting big that its investments in AI will pay off in the long run, even if they weigh on profitability in the near term. The company aims to leverage AI to improve its services, ads systems, and overall capabilities as it competes against other tech giants in social media, messaging, and the emerging metaverse space.
