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Meta Stock Plummets Despite Strong Earnings Report
The corporate headquarters of Meta, formerly known as Facebook, and located in Menlo Park, California, witnessed a significant decline in stock value, plummeting more than 16% during after-hours trading on Wednesday. This drop occurred despite Meta’s parent company announcing sales that exceeded expectations.
For the three-month period ending on March 31, Meta reported revenues of $36.5 billion. This figure represents a substantial increase of nearly 30% compared to the same timeframe in the previous year and surpassed the projections of Wall Street analysts surveyed by FactSet. Additionally, the company’s profits more than doubled, reaching $12 billion.
Mark Zuckerberg, the CEO of Meta, expressed positivity regarding the company’s performance in the recent earnings release. Zuckerberg highlighted the advancements made in Meta’s artificial intelligence (AI), particularly with the introduction of Llama 3. He emphasized the ongoing growth seen across Meta’s various applications and underscored the continued progress in developing the metaverse.
Despite these achievements, Meta’s stock experienced a sharp decline, with the share price falling by 16.5% to approximately $412 in after-hours trading. Investors showed concern over Meta’s second-quarter outlook, which projected revenues ranging from $36.5 to $39 billion for the three months ending on June 31.
Nevertheless, Meta’s stock performance over the past year has been impressive, more than doubling in value. In 2024 alone, the stock has surged by 42.5%, while witnessing an overall increase of 137.8% in the last 12 months. Meta has emerged as one of the top performers among tech stocks, alongside other industry giants like Google’s parent company Alphabet, Apple, and Tesla.
Other Developments at Meta
- Despite positive financial results, Meta’s foray into the metaverse has incurred significant losses for the company.
- Meta introduced a new AI assistant designed to answer user queries, but it has faced user dissatisfaction.
- A Meta executive in Russia received a six-year prison sentence.
- Meta recently launched a new AI chip, following similar announcements by Google and Intel.
- Upcoming updates to Meta’s smart glasses include a more conversational AI interface.
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