Meta COO Javier Olivan offloads portion of his holdings at $245,578; stock down 13% over costly AI bet
sell-off in big technology stocks on Wall Street, after the social media firm signaled its costly bet on artificial intelligence (AI) could take years to pay off. The drop was set to erase nearly $170 billion from the company's market value and triggered a fall of 3-4 per cent in shares of AI-focused Microsoft and Alphabet, both of which report earnings after market close.
The focus on AI spending, however, sparked a more than two per cent jump in shares of Nvidia, Broadcom and Marvel Technology, which analysts have called the picks and shovels of the generative AI boom. Intel, which has missed out on the AI-led rally, was up 0.7 per cent ahead of earnings.
Also Read: Microsoft, Alphabet to unveil Q1 results amid high-stakes AI frenzy after Meta crashes 15% on spending forecast Meta CEO Mark Zuckerberg, who floored Wall Street last year with his cost-cutting drive, said on a post-earnings call that costs would grow "meaningfully" over the coming years before the company makes "much revenue" from some of its AI products. This has instilled fears among investor that Zuckerberg was plunging Meta into another costly endeavor at a time when its augmented and virtual reality business was losing billions of dollars each quarter.
Meta forecast April-June revenue below estimates and raised the bottom end of its 2024 total expense forecast by $2 billion on Wednesday. It also raised the top end of its capital expenditure view as it invests in data centers essential to its efforts to catch up with AI frontrunners OpenAI and Microsoft.Milestone Alert!
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