Meta Platforms has increased its full-year capital expenditure forecast, reigniting investor concerns about whether the social media giant's historic investments in building artificial intelligence (AI) models will yield returns. The company's stock fell sharply in after-hours trading.
Meta now anticipates full-year capital expenditures to be between $125 billion and $145 billion, significantly exceeding analyst estimates and representing an increase of approximately 7.4% from the company's previous guidance. Chief Financial Officer Susan Li stated that the company is contending with "higher component prices" and additional data center costs.
Even before a shortage of memory chips drove up prices, Meta CEO Mark Zuckerberg had indicated that the company plans to invest hundreds of billions of dollars in AI infrastructure by 2030. Meta has secured hardware procurement agreements for chips with companies including NVIDIA, AMD, and Broadcom, and is currently constructing multiple large-scale data centers.
Meta's stock dropped 6.6% in after-hours trading. Prior to this decline, the stock had accumulated a gain of 1.4% for the year up to Wednesday's close in New York.
A senior analyst noted that the substantial increase in spending heightens risk, particularly because Meta relies on its own AI system, which is still perceived as trailing behind more advanced industry models.
For the first quarter, Meta reported a net profit of $26.8 billion. This figure included a one-time, non-cash income tax benefit of $8 billion. Analyst estimates, which had excluded this one-time gain, had projected an unadjusted net profit of approximately $17.2 billion.
First-quarter revenue reached $56.3 billion, surpassing Wall Street expectations of $55.51 billion. The company provided a revenue forecast for the current quarter in the range of $58 billion to $61 billion, which is largely in line with market expectations.
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