Meta Platforms predicted on Wednesday that second-quarter revenue may be lower than market expectations, with a potential reality test centered on expectations about how much new AI tools will boost the company’s business. suggested sex.
Meta’s stock price fell about 10% in extended trading following the news, wiping out $125 billion worth of stock market value.
The Facebook and Instagram parent company expects April-June sales in the range of $36.5 billion to $39 billion, with a median of $37.8 billion, according to LSEG data, but analysts expect The forecast is $38.3 billion.
Meta also raised its spending forecast for this year to support investments in new AI products and the computing infrastructure needed to support them.
The company expects capital spending in 2024 to be in the range of $30 billion to $40 billion, up from its previous forecast of $35 billion to $37 billion.
The total cost estimate was also raised from $94 billion to $99 billion to $96 billion to $99 billion.
The results appear to temper expectations after a string of blockbuster quarters for Meta, which comes after reporting solid results and announcing its first-ever dividend since its last quarterly report in Wall Street history. It recorded the largest single-day increase in market capitalization. .
The social media giant is updating its ad-buying products with AI tools and short video formats to drive revenue growth, while also introducing a chat assistant to drive engagement on social media properties. We are also introducing new AI features such as:
The company announced last week that it would make pricing for its Meta AI assistant more prominent across its suite of apps. This means that in the second quarter we will start to see how popular the product is with users.
The company is also benefiting from regulatory pressure on Chinese-owned short video competitor TikTok, which is under threat of ban by the United States.
Meta’s first-quarter sales were $36.5 billion, roughly in line with expectations of $36.2 billion, according to LSEG data.
Meta’s Daily Active Users (DAP), a metric used to track daily unique users of any of the company’s apps Facebook, Instagram, Messenger and WhatsApp, grew 7%.
DAP increased by 8% last quarter.
Meta, for the first time, disclosed only DAP figures for user growth.
The company announced earlier this year that it would no longer outperform its flagship social network, Facebook, whose growth has slowed in recent years.
