Shares of Meta plunged on Wednesday after the US tech giant announced plans to increase spending on artificial intelligence (AI) technologies.
More than $150bn (£120bn) has been wiped from Facebook parent company’s market value, according to recent results covering the first three months of the year.
In a sign that investors may be rejecting Meta’s commitment to investing huge sums in AI, shares of the company fell as much as 13 percent during after-hours trading in New York.
The decline came despite a net profit of $12.4 billion, although Meta’s first-quarter profit more than doubled by 117 percent compared to the same period last year.
This followed Meta’s offer to cut costs in 2023 by cutting more than 21,000 jobs.
The Facebook and Instagram operator also reported revenue of $36.5 billion, up 27 percent over the same period in 2023, as digital advertising recovered.
However, the company said it plans to invest more than expected in AI technology and the so-called “metaverse,” increasing its estimated capital spending to as much as $40 billion from $30 billion to $37 billion.
The company said it expects its total costs this year to be up to $99 billion and said the losses were in its “reality labs,” where its speculative efforts to develop Metaverse hardware and apps take place, would continue to rise.
The drop in share price came even as social media rival TikTok faced a ban in the US.
Meta said: “We expect capital expenditures to continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts.”
In January, Mr. Zuckerberg pledged to challenge rivals such as Google Deepmind and OpenAI, the developer of ChatGPT.
To this end, Meta is currently planning to purchase 350,000 powerful AI processors.
The latest setback for the share price comes after the Facebook owner’s valuation has risen more than 40 percent so far this year and Mr Zuckerberg’s net worth has risen above that of his rival Elon Musk.
Mr Zuckerberg said the latest results were the result of a “good quarter” for the company, which took “another step towards building the world’s leading AI”.
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