San Francisco (United States) (AFP) – Meta shares dove more than eight percent in after-hours trading Wednesday after the tech giant reported a US tax charge took a roughly $16 billion bite out of its quarterly profit. The parent company of Facebook, Instagram, and Whatsapp said that its net income would have reached $18.64 billion in the recent quarter had it not been for a one-time tax charge prompted by provisions in President Donald Trump’s “One Big Beautiful Bill Act.”
Quarterly revenue, however, exceeded analyst expectations at $51.2 billion, a 26 percent increase from the same period a year earlier. Meta also notched up the forecast of how much money it expects to spend this year as it invests heavily in being a leader in artificial intelligence. The company said it expects capital expenditures to tally somewhere between $70-$72 billion, at the higher end of a range it had previously disclosed. Costs and expenses in the quarter were $30.71 billion, an increase of 32 percent from the same period last year, with some of that cost going to talent for Meta’s AI efforts.
“I am very focused on establishing Meta as the leading frontier AI Lab, building personal super intelligence for everyone and delivering the app experiences and computing devices that will improve the lives of billions of people around the world,” chief executive Mark Zuckerberg said on an earnings call. “We’re heads down, developing our next generation of models and products.”
Meta’s Family of Apps segment, which includes Facebook, Instagram, WhatsApp, and Messenger, saw daily active users reach 3.54 billion in the quarter, up 8 percent from a year earlier. Meta announced earlier this month that it will begin using people’s conversations with its AI chatbot to tailor ads and content they see on Facebook and Instagram. Meta also recently showed off new smart glasses as it continued to bank on a lifestyle shift toward blending reality and virtual space, despite the efforts inflicting heavy financial losses. Announcements included the debut of Meta Ray-Ban Display smart glasses that have built-in screens that allow wearers to see messages, photos, and more as though looking at a smartphone screen.
Zuckerberg has predicted that AI-infused smart glasses will be the “next major computing platform,” eventually replacing the smartphone. But Reality Labs – Meta’s virtual and augmented reality unit – has consistently posted big losses. Meta is locked in a bitter rivalry with other tech behemoths as they invest heavily in AI, aiming to ensure the technology benefits society and generates profits in the not-so-distant future. Most analysts believe Meta will make the investment pay off by improving its advertising efficiency and creating new opportunities, such as with its smart glasses through a partnership with Ray-Ban maker EssilorLuxottica.
© 2024 AFP
