FB did okay in its earnings call for this last quarter but warned on the next quarter.
Expectations revenue mid point estimate falls while costs rise. AI infrastructure is the main reason for costs rising. Stock falls 12%.
The AI won’t work as they want. We are over 50 years away from it working.
Profits are lumpy.
Dealbook the NYT by Andrew Ross Sorkin
On Meta
Shares in the parent company of Facebook and Instagram are down 15 percent in premarket trading today, erasing more than $200 billion in market value, after Meta revealed the hefty costs of its bet on artificial intelligence. That makes clear that while Wall Street loves the opportunities that A.I. presents, it may not tolerate the profligate spending it takes to get them for that much longer.
Meta warned that A.I. costs would weigh on near-term results. The company plans to spend $35 billion to $40 billion this year — much of that on the technology — up from a forecast of $30 billion to $37 billion. It also expects second-quarter revenue to come in at $36.5 billion to $39 billion, below analyst estimates.
Mark Zuckerberg urged investors to be patient. Here’s what Meta’s C.E.O. told analysts:
It’s worth calling that out, that we’ve historically seen a lot of volatility in our stock during this phase of our product playbook, where we’re investing and scaling a new product, but aren’t yet monetizing it.