Meta shares collapsed starting from the night between Wednesday and Thursday and then again today, April 25, at the opening of the market session on Wall Street. It is the reaction of investors to the presentation of the company’s accounts and the accompanying speech by founder Mark Zuckerberg. Profits for the first quarter of 2024, to be honest, were solid, more than double those achieved last year, with revenues growing by 27%. But what seems to be making the markets nervous is the medium-long term horizon. In fact, Zuckerberg spent a good part of his parents’ time yesterday opening remarks to talk about the challenge that now seems to be closest to his heart: artificial intelligence. “We will invest aggressively” in the sector to become “the leading AI company in the world”, promised the head of Meta, which has to contend with competition from giants such as Google and Microsoft. The main challenges are called Llama 3, the new predictive language model unlined to compete with ChatGPT, and Meta AI. Not to mention the food sector device latest generation wearables – from glasses for augmented reality to Quest headsets for so-called “mixed reality”, for which the new operating system was revealed on Monday.
And the revenues?
Systems with high potential, but also with high production costs, especially if you aim to beat the competition of those who started first with research and investments. And so 5 billion dollars of additional costs for the necessary investments appeared in Meta’s accounts. Meta will spend «significantly before being able to extract revenues from some of these products. But once our AI services reach scale, we have a strong track record of effectively monetizing them,” Zuck told investors. However, they reacted with great skepticism. Result: inafter-market last night Meta shares fell by 19%, erasing over 200 billion in capitalization on the stock market. And today the company’s stock opened still down 15%. Zuckerberg has put a good face on things, for now: “I think it’s right to underline that historically we have always seen a lot of volatility on the stock market during the launch phase of a product when we are investing but not yet monetising.”
