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Meta Platforms: Sales increase to 36.46 billion in the first quarter of 2024 - investments alarm investors
Meta share collapses: Facebook parent doubles profits - investors shocked by increase in investments. Learn more! #MetaPlatforms #Facebook #Profit #Investments #AI
Meta Platforms: Sales increase to 36.46 billion in the first quarter of 2024 - investments alarm investors
Meta Platforms, the parent company of Facebook, released its report for the first quarter of 2024. Revenue increased significantly compared to the same period last year, reaching $36.46 billion, exceeding forecasts. The company's quarterly revenue more than doubled from nearly $12.4 billion, largely due to its thriving advertising business. Daily usage of Meta's various apps, such as Instagram and WhatsApp, reached 3.24 billion users in March.
Despite the positive growth in the advertising business, the Reality Labs division, which deals with virtual reality and glasses, continued to report high operating losses. Operating red numbers amounted to $3.85 billion, an increase from the same quarter last year. Mark Zuckerberg expressed satisfaction with the quarterly results and highlighted the progress in developing Meta AI and expanding the Metaverse.
Meta announced that investments would increase significantly, shocking investors. The forecast for the current quarter came in lower than expected, raising concerns among analysts and investors. Expenses for this year were increased to between $96 billion and $99 billion, while revenue forecasts fell short of expectations.
Mark Zuckerberg aims to make Meta the leading force in artificial intelligence. These visions, combined with the planned large investments, led to a sharp decline in Meta's share price. Investors were concerned about the long-term impact of these investments on the company and its financial results.
Although Meta delivered positive first quarter results, much of the attention focused on the outlook for the expected high costs associated with the AI offensive. The analysts rate the expansion of the AI offering positively, but see short-term burdens for the company. Despite the initial concerns, some analysts are lowering their estimates but maintaining their buy ratings.
Investor reaction to Meta's future plans highlights the challenges the company faces in executing its vision and delivering long-term returns to shareholders. Despite the strong quarterly results and positive trends in the advertising business, the heavy investments in AI and the metaverse must be carefully considered to maintain investor confidence.