Meta shares fall as frustration grows over AI spending plans
📰 source: bbc_business · 💼 business
meta shares fell 11% on wednesday after its q2 results showed revenue up 28% to $61bn but profits down 14% to $6bn. the company raised its spending forecast for the year to $130bn-$145bn, mostly on ai, up from $125bn three months ago. free cash flow dropped to $784m, the lowest in at least five years, prompting analyst mike proulx at forrester to compare it to the metaverse missteps: 'meta is once again spending ahead of proven product demand.'
ceo mark zuckerberg defended the spending, saying ai is 'accelerating every part of our core business' and that meta plans to sell ai tools to other firms. he added that ai agents 'will be the next wave of our product line.' cfo susan li said selling ai tech would drive returns, but the revenue hasn't materialized yet. meanwhile, microsoft — also reporting wednesday — saw its stock rise 5% after hours on solid earnings, showing that ai spending can be acceptable if tied to clear returns.
why it matters: investors fret over meta's soaring ai costs with no clear payoff, pressuring stock amid broader tech spending concerns.
source: bbc_business
sentiment: -0.50 · impact: 0.75