Meta's stock drops 10%+ on weak Q2 revenue guidance and increasing FY 2024 capital expenditures from $30B-$37B to $35B-$40B due to AI infrastructure investments
should investors consider buying? Kathleen Gallagher / Business Post : Shares in Meta plummet as it forecasts spending spree TJ Denzer / Shacknews : Facebook (META) issues Q2 2024 revenue guidance below analyst expectations Emily Price / Fast Company : Meta stock plunges 12% on lukewarm earnings, despite strong advertising numbers Ashley Capoot / NBC News : Meta stock plunges 15% as company plans to invest heavliy in artificial intelligence Reuters : Meta shares drop after warning of weak revenue growth, higher AI expenses The Irish Times : Meta shares slump as expenses near $100bn Proactive : Meta reveals weaker guidance, sending shares lower despite 1Q earnings beat Chris Katje / Benzinga : Meta Platforms Q1 Earnings Highlights: Facebook Owner Beats Estimates, But Guidance, Higher Costs Ding Stock Caitlin Huston / The Hollywood Reporter : Meta Reports Quarterly Revenue of $36.5B But Stock Falls After Guidance Rita Nazareth / Bloomberg : Tech Giants Hit in Late Hours After Meta's Outlook: Markets Wrap Threads: Venkatesh Thallam / @vthallam : Working at Meta is such a roller coaster, one moment you'd be checking lambo prices and the next quarter you'd be rationing your food 🥲 Kurt Wagner / @kurtwag8 : $META stock is now down 12%. It's not uncommon for an increase in spending to hurt the stock, but I'm a little surprised at the sharp decline only because I thought investing more into *AI* of all things would be considered more acceptable than other kinds of spending X: Sophie / @netcapgirl : zuck, my boy. what's happening. idk if you saw the response to the capex guide but long story short, it's not great. they're saying uh, uh, there's no cost discipline & the ROI from AI is unknown. have you seen the pic of you w the mustache? yeah i'm thinking that's our strategy [image] Gene Munster / @munster_gene : The most important read from the $META capex guidance is related to $AAPL. Building AI infrastructure takes several years and tens of billions of dollars. When Apple reports their March quarter on May 2nd, it will likely mark the first time they outline expectations for their AI infrastructure spend. I believe the more AI investment the better. I hope the market agrees. @mayhem4markets : That $META earnings call was an absolute disaster. Zuck tried to convince his investors that AI is the future, when there's no real clear path to how it makes profit. Then he tried to tie it into the metaverse. At that point I bet a lot of people got PTSD, because the selling accelerated further... Dare Obasanjo / @carnage4life : Meta employees in the news today. How it started vs. How it's going [image] Rat King / @mikeisaac : basically as this call went on the stock kept dropping. wall street extra twitchy today. Meta employees may not want to look at their fidelity accounts today Sal Rodriguez / @sal19 : Zuckerberg to analysts just now: “We're in a place where we've shown that we can build leading models and be the leading AI company in the world.” Gene Munster / @munster_gene : $META dropped an additional 5% (now down 17%) on Zuckerberg's opening comments that will be growing Capex and energy meaningfully before seeing the greater benefit of AI. He wants to get investors on the same page, they're entering a multi year investment cycle. My take, the stock action is an overreaction. Brad Freeman / @stockmarketnerd : Zuck spooking investors with talks of a multi-year AI infrastructure investment ramp. CapEx guide surprised some. I'll be adding to what is my largest position if this falls much more. Countless examples of these investments cycles being prosperous. Don't bet against Zuck IMO. Eric Jhonsa / @ericjhonsa : Zuck: “[We] should invest significantly more over the coming years to build even more advanced models and the largest scale AI services in the world. As we're scaling CapEx and energy expenses for AI, we'll continue focusing on operating the rest of our company efficiently. But... [image] @thetranscript_ : $META CEO: “Before we make much revenue from some of these new products, I think it's worth calling out that we've historically seen a lot of volatility in our stock during this phase of product playbook where we're investing & scaling new products but aren't yet monetizing them” [image] Alexei Oreskovic / @lexnfx : And Zuck just said he expects AI to be a “multi year investment cycle” Ed Ludlow / @edludlow : $META is now down >16% in after hours (a leg lower on Zuck commentary on the spending plan and where Meta will or wont be focused on spending). Ed Ludlow / @edludlow : $NVDA down >1% in after hours, following $META capex/expenses FY guide Rat King / @mikeisaac : zuckerberg on earnings call with investors basically telling wall street “yeah we are spending money like crazy but also weve done this a bunch before and it worked out so please chill” Rihard Jarc / @rihardjarc : @Kasbar_G I think it's more about revenue guidance, although the top range is higher than estimates and partly capex (but that was mostly expected, IMO). From what I see, nothing fundamentally major. I will share more after the call. Rihard Jarc / @rihardjarc : The market reacting emotionally to short-term rounding number “misses” for the next quarter and a company investing to increase their moat is something I, as a long-term investor, will never get tired of, as it gives me a chance to add to my highest conviction positions. $META Gene Munster / @munster_gene : I should have mentioned before, another factor to the stock being down (now 13%) is they guided 2024 full year total expenses up 1% because of legal higher infrastructure. It does not have numbers for Reality Labs. Alexei Oreskovic / @lexnfx : In 5 months Meta has increased the amount of money it plans to spend on cap ex for AI this year by $5 billion. (October forecast $30 billion to $35 billion, now $35 billion to $40 billion) Gene Munster / @munster_gene : $META down 12% for two reasons. 1. Midpoint of revenue guidance for June is 1.3% below the Street. 2. They are increasing the midpoint of Capex spend by 12%. My take: 1. The 1.3% revenue guide down for June is a rounding error under normal circumstances. The problem for META is expectations were for a guide up. In other words, investors are viewing the guidance as 5-7% below expectations. 2. Increasing Capex is a good thing in an AI first world. Highly likely this is most related to building Llama. I don't believe this is related to Reality Labs. On the material positive side, they grew Family daily active people (DAP) by 7% YoY, compared to 8% in the Dec-13 quarter. Anything above 1% is a win because it shows the base is expanding. Sven Henrich / @northmantrader : $META beats: -10% $TSLA misses +10% [image] Kelly / @selfmademastery : Zuckerberg earned the right to spend a lil money, relax guys. $META Eric Seufert / @eric_seufert : Meta $META down 10% following its earnings release on weak Q2 guidance. Revenue increased 27% Y/Y, ad impressions increased 20% Y/Y, average price per ad increased 6% Y/Y. [image] Eric Jhonsa / @ericjhonsa : $META ups its 2024 capex guide to $35B-$40B from $30B-$37B (compares with 2023 capex of $28.1B). Total expense guide slightly upped to $96B-$99B from $94B-$99B. [image] LinkedIn: Roderick Mann : QUESTION: Why doesn't Mark Z get the benefit of the ‘doubt’ as Papa Elon did? — ANSWER: There is no answer, it defies logic, reason, and financial fundamentals. … Ashley Capoot : Meta reported first-quarter results on Wednesday that beat analysts' estimates, but shares plunged in extended trading on a weaker-than-expected forecast. … Forums: r/wallstreetbets : Meta shares sink 11% on weak revenue guidance