Meta's stock drops 8% as AI spending raises investor concerns
Meta (yep, the company behind Facebook and Instagram) just saw its stock drop 8% on Wednesday.
Why? Even though they pulled in 26% more revenue this quarter—way above what Wall Street expected—they announced some big spending plans for artificial intelligence (AI).
CEO Mark Zuckerberg says Meta will ramp up investments next year to keep pace in the AI race, but overall costs this quarter were already up by 32% compared to last year.
Meta is doubling down on AI with new division
Meta is doubling down on AI with a new division called "Superintelligence Labs," and they're buying loads of NVIDIA's powerful chips to make it happen.
A one-time $16 billion regulatory charge put a dent in profits, but without it, net income would have hit $18.64 billion.
Looking ahead, Meta expects to spend between $70-72 billion this year and is continuing to invest in smarter AI tools and leverage its massive user base as it faces rising costs.