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Meta almost hit bear market territory in after hours trading yesterday

Wow! Meta almost hit bear market territory after trading hours yesterday. What happened? In short, it was a disastrous earnings call that triggered the rout. At its worst the stock dropped 19.5 per cent from its intraday peak. That's about US$240 billion wiped out – yikes!

Were you listening in? I'm in New York at the moment, so this was pretty hard to miss. In short, investors got the jitters after Mark Zuckerberg announced that Meta was going to increasing spending to US$37bn to US$40bn (compared to just $28.1bn spent last year).

This is the reason why. He wants to turn Meta into “the leading AI company in the world”, and after the metaverse fiasco, the market isn't buying it.

Here's the irony. The company's revenues have risen 27 per cent to US$36.5bn in Q1 2024. He might have also inadvertently sent a message to the market that Meta is falling behind the AI race: he announced that they are throwing in more money to “continue to accelerate our infrastructure investments to support our artificial intelligence (AI) road map”.

Source: Eeagli

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