Zuckerberg’s announcement that AI and Metaverse ventures could burn through €40 billion in 2024 caused the firm’s valuation to drop by over €200 billion. The metaverse, Zuckerberg’s virtual reality project, has not won over consumers or businesses despite being accessible through the company’s headsets and glasses.
Facebook’s parent company revealed its first-quarter financial results, showing a profit increase, higher-than-expected spending, and a predicted drop in second-quarter advertising revenue, leading to a sell-off. Meta’s stock, which had climbed 116 per cent over the past year and 45 per cent year-to-date, fell from €493 to as low as €407 after hours due to investor worries about escalating expenses.
Previously at €166 billion, Zuckerberg’s wealth reportedly shrank by more than €20 billion. The company reported a 27 per cent revenue increase to €29.2 billion for the quarter ending in March, the fastest growth since the third quarter of 2021, with profits more than doubling to €10 billion from €4.6 billion the previous year.
Zuckerberg, addressing the cocaine nose jobs of Wall Street, estimated that “over 3.2 billion people use at least one of our applications daily, and we’re seeing strong growth in the US.”
He also noted that Meta’s capital expenditures for 2024 are expected to be between €35 to €40 billion, up from the earlier €30 billion to €37 billion forecast. The company’s total expense forecast also increased to €96 billion to €99 billion, from €94 billion to €99 billion.
Zuckerberg urged investors to be patient as Meta delves into AI, acknowledging that launching new products can cause stock volatility.
“Developing leading AI is a more significant effort than adding other features to our apps, and it will likely take several years,” he said.
Last week, Zuckerberg introduced the latest version of Meta AI, now a smart assistant across platforms like Instagram, WhatsApp, Messenger, and Facebook, in over a dozen English-speaking countries, including Australia, Canada, Singapore, and the United States.
The AI, powered by the company’s most potent large language model, LLaMA 3, has been released as an open-source developer tool.