- Meta (META) unveiled its first-quarter earnings, surpassing analysts' expectations for both revenue and earnings. However, a weaker-than-expected forecast for the second quarter led to a sharp decline in the social media giant's shares, dropping by as much as 14% in early trading on Thursday. The company anticipates second-quarter revenue to range between $36.5 billion and $39 billion, falling short of midpoint estimates of $38.24 billion.
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In addition to the subdued Q2 outlook, Meta's CFO Susan Li revised the company's full-year total expenses estimate upwards, citing increased infrastructure and legal costs. CEO Mark Zuckerberg emphasized the company's focus on expanding investment in AI, which would significantly impact operating expenses despite efforts to maintain operational efficiency. Meta's Reality Labs division is projected to report heightened year-over-year operating losses as the company continues to invest in AI, AR, and VR initiatives. Despite Meta's strong financial performance, concerns about future expenses and the Q2 revenue forecast contributed to the stock's decline.
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Meta's recent announcements regarding AI initiatives, including the introduction of its Meta AI chatbot and plans to make its Horizon operating system open source, highlight its commitment to innovation in the AR/VR space.
