Meta Group reveals higher Q1 profit amid concerns about AI investments
Date
4/25/2024 6:15:43 AM
(MENAFN) The Meta Group, parent company of Facebook, Instagram, and WhatsApp, reported a significant increase in net profits for the first quarter of this year, doubling its earnings. However, concerns have arisen on Wall Street regarding the high costs associated with the company's investments in artificial intelligence (AI) initiatives.
Ranked second globally in online advertising, Meta experienced a robust quarterly sales growth of 27 percent, reaching USD36.5 billion. The company's profits totaled USD12.4 billion for the quarter, surpassing analysts' expectations. Despite these positive financial results, Meta's plans to ramp up investments in AI have stirred apprehension among investors.
Meta announced on Wednesday that its investments in AI are expected to range between USD35 and USD40 billion this year, exceeding previous projections. These investments are deemed necessary to address various AI-related needs, including infrastructure enhancements, research and development endeavors, and other related initiatives.
The revelation of Meta's increased investment in AI prompted a 16 percent decline in the value of the company's shares during electronic trading following the closure of the New York Stock Exchange. This reaction underscores the uncertainty surrounding the potential impact of Meta's expanded AI investments on its financial performance and market valuation.
During a meeting with analysts, Meta's president, Mark Zuckerberg, expressed optimism and ambition regarding the company's AI initiatives, highlighting the strategic importance of AI in Meta's future endeavors. Despite the concerns raised by investors, Meta remains committed to advancing its AI capabilities and leveraging them to drive innovation and growth across its platforms.
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