Meta shares take $125bn hit as Facebook owner raises spending forecasts
Shares in Meta, the owner of Facebook, WhatsApp and Instagram, have fallen sharply after the company revealed it had raised its cost forecast for the current year.
Investors sent the stock 10% lower in after-hours trading in New York when Meta‘s first-quarter results showed further bills were expected to fund new artificial intelligence (AI) products and the infrastructure behind them.
The company, founded and run by Mark Zuckerberg, said it now forecast 2024 capital expenditure in the range of $35bn-$40bn.
That was up from a previous range of $30bn-$37bn.
Mark Zuckerberg, pictured at a US Congressional hearing, is under investor pressure to spend wisely
It also raised its total expenses forecast to $96bn-$99bn – a rise of $2bn in the low-range mark.
The shifts, while hardly huge in scale, nevertheless threaten to reopen old wounds following a 2022 row with investors over Zuckerberg’s bets on technology.
Meta has been updating its ad-buying products with AI tools and short video formats to boost revenue growth, while also introducing AI features like a chat assistant to drive engagement on its social media properties.
The other main key metrics reported by the company beat financial market expectations, according to LSEG data.
Total revenue rose 27% to $36.5bn and Meta forecast a slight improvement in the current March-June quarter.
However, its low-range sum came in below market forecasts and analysts said that the company’s view had contributed to the share price sell-off.
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A 10% reduction in the share price equated to lost market value of $125bn (£100.3bn) they said, as the values continued to fluctuate.
The stock remains around 30% up on the year to date.
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Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said of the reaction: “Meta’s substantial investment in AI has the ability to hugely improve engagement with its platforms, and therefore the amount marketers are prepared to pay for ad space.
“The group has indeed surpassed expectations in a time when digital advertising uncertainty remains rife.
“Over 50 countries are due… elections this year, which hugely increases uncertainty, and digital spending tends to move down when risks increase.
“This speaks to Meta’s enormous scale and importance to modern-day marketers. Its fortunes are probably also being bolstered by TikTok’s uncertain future in the US. One potential outcome from all this turmoil could well see TikTok added to the Meta family.”
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She added: “For all Meta’s bold AI plans, it can’t afford to take its eye off the nucleus of the business – its core advertising activities.
“That doesn’t mean ignoring AI, but it does mean that spending needs to be targeted and in-line with a clear strategic view.”
The King has written to former US president Joe Biden after he was diagnosed with an aggressive form of prostate cancer, Buckingham Palace said
The monarch, who is undergoing his own treatment for an undisclosed cancer, hosted the 82-year-old for tea and talks at Windsor in July 2023.
Mr Biden was diagnosed on Friday, with tests revealing the cancer had spread to his bones.
The former president posted an image of himself and his wife Jill on X on Monday and wrote: “Cancer touches us all. Like so many of you, Jill and I have learned that we are strongest in the broken places. Thank you for lifting us up with love and support.”
The King and Joe Biden at Windsor Castle in July 2023. Pic: Reuters
The King’s letter comes after British Prime Minister Sir Keir Starmer said he was “very sorry to hear President Biden has prostate cancer”.
“All the very best to Joe, his wife Jill and their family, and wishing the President swift and successful treatment,” he added.
Meanwhile US President Donald Trump said he was “saddened” by the news, adding: “We extend our warmest and best wishes to Jill and the family, and we wish Joe a fast and successful recovery.”
Former US president Barack Obama said: “Michelle and I are thinking of the entire Biden family.
“Nobody has done more to find breakthrough treatments for cancer in all its forms than Joe, and I am certain he will fight this challenge with his trademark resolve and grace. We pray for a fast and full recovery.”
Read more: Biden diagnosed with ‘aggressive’ form of prostate cancer
Barack Obama (right) with Joe Biden at a campaign event in 2022. File pic: Reuters
After a poor debate performance against Mr Trump and amid escalating concerns around his age and fitness to serve, Mr Biden withdrew from the 2024 presidential election race and endorsed his vice president Kamala Harris.
Ms Harris wrote on X after his diagnosis: “We are keeping him, Dr. Biden, and their entire family in our hearts and prayers during this time.
“Joe is a fighter – and I know he will face this challenge with the same strength, resilience, and optimism that have always defined his life and leadership. We are hopeful for a full and speedy recovery.”
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Mr Biden’s diagnosis: What we know
Former US president Bill Clinton wrote on social media: “My friend Joe Biden’s always been a fighter. Hillary and I are rooting for him and are keeping him, Jill, and the entire family in our thoughts.”
Hillary Clinton, who unsuccessfully ran for president in 2016, said she was “thinking of the Bidens as they take on cancer, a disease they’ve done so much to try to spare other families from”.
Speaker of the US House of Representatives Mike Johnson said it was “sad news” and his family “will be joining the countless others who are praying” for Mr Biden.
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Former House speaker Nancy Pelosi described Mr Biden as a “great American patriot” and said she was “praying for him to have strength and a swift recovery”.
Mr Trump’s secretary of state, Marco Rubio, wrote on social media that he and his wife were “united in prayer for the Biden Family during this difficult time”.
Politicians have sent messages of support to Joe Biden, who has been diagnosed with prostate cancer.
The 82-year-old, who is the oldest person to ever serve as US president, was described as a “fighter” with people wishing him a “fast and full recovery”.
US President Donald Trump said he was “saddened” by the news, adding: “We extend our warmest and best wishes to Jill and the family, and we wish Joe a fast and successful recovery.”
Former US president Barack Obama said: “Michelle and I are thinking of the entire Biden family.
“Nobody has done more to find breakthrough treatments for cancer in all its forms than Joe, and I am certain he will fight this challenge with his trademark resolve and grace. We pray for a fast and full recovery.”
Read more: Biden diagnosed with ‘aggressive’ form of prostate cancer
Barack Obama (right) with Joe Biden at a campaign event in 2022. File pic: Reuters
British Prime Minister Sir Keir Starmer said he was “very sorry to hear President Biden has prostate cancer”.
“All the very best to Joe, his wife Jill and their family, and wishing the President swift and successful treatment,” he added.
After a poor debate performance against Mr Trump and amid escalating concerns for his health, Mr Biden withdrew from the 2024 election and endorsed his vice president Kamala Harris.
Ms Harris wrote on X: “We are keeping him, Dr. Biden, and their entire family in our hearts and prayers during this time.
“Joe is a fighter – and I know he will face this challenge with the same strength, resilience, and optimism that have always defined his life and leadership. We are hopeful for a full and speedy recovery.”
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Mr Biden’s diagnosis: What we know
Former US president Bill Clinton wrote on social media: “My friend Joe Biden’s always been a fighter. Hillary and I are rooting for him and are keeping him, Jill, and the entire family in our thoughts.”
Hillary Clinton, who unsuccessfully ran for president in 2016, said she was “thinking of the Bidens as they take on cancer, a disease they’ve done so much to try to spare other families from”.
Speaker of the US House Of Representatives Mike Johnson said it was “sad news” and his family “will be joining the countless others who are praying” for Mr Biden.
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Former House speaker Nancy Pelosi described Mr Biden as a “great American patriot” and said she was “praying for him to have strength and a swift recovery”.
Mr Trump’s secretary of state, Marco Rubio, wrote on social media he and his wife were “united in prayer for the Biden Family during this difficult time”.
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