Meta’s market value lost US$200 billion, Zuckerberg focused on AI and Metaverse | Wilnesh News

Mark Zuckerberg begins Yuan’s earnings call discussed artificial intelligence. He then turned to the virtual world, promoting his company’s headsets, glasses and operating systems. His opening remarks focused almost entirely on the many ways Meta loses money.

Investors are not interested. Meta’s stock price plummeted 19% in after-hours trading on Wednesday, wiping out more than $200 billion in market value. The stock price fell despite Meta reporting better-than-expected first-quarter profits and revenue.

Zuckerberg appears ready to sell.

“I think it’s worth pointing out that at this stage of our product strategy, our stock has historically experienced a lot of volatility and we are investing in expanding new products but not monetizing them yet,” Zuckerberg said. He cited past efforts such as short-video services Reels, Stories and the transition to mobile devices.

98% of Meta’s revenue comes from digital advertising. But as much as Zuckerberg talks about advertising, he’s looking to the future and how companies can turn current investments into advertising revenue. Discussing Meta’s efforts to build “leading artificial intelligence,” Zuckerberg said, “There are multiple ways to build a large business here, including expanding business messaging, introducing advertising or paid content into artificial intelligence interactions.”

He spent more time talking about Meta Llama 3, the company’s latest large-scale language model, and the recently launched Meta AI, the company’s answer to OpenAI’s ChatGPT.

Zuckerberg then began to focus on potential expansion opportunities in the mixed reality headset market, such as headsets for work or fitness.Yuan open access Zuckerberg on Monday said it would help the mixed-reality ecosystem grow faster by offering support for the operating system for its Quest headset.

He also talked about Meta’s AR glasses, which he called “the ideal device for artificial intelligence assistants because you can let them see what you see and hear what you hear.”

Meanwhile, Meta’s Reality Labs division, which houses the hardware and software the company uses to develop nascent virtual worlds, continues to hemorrhage cash. Reality Labs reported a loss of $3.85 billion on first-quarter sales of $440 million. Since the end of 2020, the sector’s cumulative losses have exceeded $45 billion.

Zuckerberg bought himself some time.

Meta’s shares have nearly tripled in the last year and were up 40% in 2024 as of Wednesday’s close.

After a brutal 2022, in which the company lost about two-thirds of its market value, Zuckerberg appears to have regained Wall Street’s confidence.

The rise in shares was driven by a cost-cutting plan implemented by Zuckerberg early last year, when he told investors that 2023 would be “the year of efficiency.” The company has cut headcount and eliminated unnecessary projects in an effort to become a “stronger, more agile organization.”

Zuckerberg said on Wednesday that the company would continue to operate efficiently, but that shifting existing resources toward artificial intelligence investments would “meaningfully expand the scope of our investments.”

Meta said capital expenditures in 2024 are expected to be between $35 billion and $40 billion, up from a previous forecast of $30 billion “as we continue to accelerate infrastructure investments to support our artificial intelligence (AI) roadmap.” increased to US$37 billion.

Zuckerberg said he expects it will be a “multi-year investment cycle” before Meta’s artificial intelligence products expand into profitable services, but noted that the company has a “strong track record” in the sector.

Meta Chief Financial Officer Susan Li agreed with Zuckerberg’s remarks and said the company needs to develop advanced models and expand its products before it can generate meaningful revenue.

“While the long-term potential is huge, we are still early in the return curve,” Li said.

Even before the call began, investors began reducing their holdings. That’s because Meta’s lower revenue forecast for the second quarter overshadowed first-quarter growth.

As the plunge in stock prices intensified, Zuckerberg told investors that if they were willing to ride the wave, they would likely be rewarded.

Zuckerberg said: “Historically, investing in building these new scale experiences in our apps has been a very good long-term investment for us and the investors who have stuck with us, and the initial signs are promising. Very positive. “But building leading artificial intelligence will also be a larger undertaking than the other experiences we add to the app, and it may take several years. “

watch: Artificial intelligence has not yet achieved the Meta “improvement” Wall Street expected