Meta shares plummet near 10% after earnings, Google skyrockets
Meta Shares Fall as Google Parent Surges Following Earnings Reports
NEW YORK — Meta Platforms Inc. saw its shares decline nearly 10 percent during Thursday’s trading session on Wall Street, while Alphabet Inc., the parent company of Google, experienced a significant increase of more than 6 percent.
These fluctuations occurred a day after both tech giants released their quarterly earnings, revealing a stark contrast in investor reactions related to their substantial investments in artificial intelligence.
Other major tech companies, including Amazon and Microsoft, also reported earnings Wednesday. However, their shares reflected concerns over AI, with Amazon’s stock dropping 2 percent and Microsoft’s falling 3.7 percent.
As major players in the tech industry invest billions into cloud computing and AI, they are competing for leadership in a field they believe will transform various aspects of daily life.
Investors reacted positively to Google’s performance, applauding its successful transition toward AI and robust revenue across its key divisions. The company reported a profit of $62.6 billion on revenue just shy of $110 billion, surpassing both the previous year’s figures and market expectations.
In contrast, Meta’s earnings report alarmed investors, as the company disclosed expenses totaling $33.4 billion, driven by its pursuit of “superintelligence.” This pursuit includes aggressive hiring for top AI talent as part of its strategy.
Additionally, Meta increased its projected capital expenditures for the year by $10 billion, now estimating between $125 billion and $145 billion, primarily for data center investments.
Unlike Amazon, Microsoft, and Google, which monetize AI capabilities for cloud clients, Meta’s AI investments do not directly generate revenue. To finance its ambitious AI plans, the company announced last week it would cut approximately 8,000 jobs and leave an additional 6,000 positions unfilled.
At the opening of trading, the Dow Jones Industrial Average rose 0.8 percent to approximately 49,241. The S&P 500 increased by 0.2 percent to around 7,151, while the Nasdaq Composite Index remained stable at about 24,665.
