"Meta Platforms ( NASDAQ:META) shares really imploded on Thursday, as investors grew concerned about the hefty AI spending as well as the rare miss on earnings. Undoubtedly, a drop of more than 11% in a single day is quite out of the ordinary when it comes to a Magnificent Seven stock, especially one that wasn't exactly expensive going into a quarterly reveal. Still, the broad market wants to see more when it comes to the heavy spenders on AI."
"Add the $16 billion tax hit into the equation as well as continued cash burn from the Reality Labs division, and it's all too easy to throw in the towel on shares of Meta Platforms after an unexpectedly noisy and less-than-ideal quarter, to say the least."
"When you take the massive tax charge out of the equation, the numbers were quite robust. And while higher expenses also weighed on margins, I think investors have little reason for concern, especially since Meta Platforms is well on track to monetize its AI innovatio"
Shares of Meta Platforms fell more than 11% after a rare earnings miss and investor concern over heavy AI spending. A $16 billion one-time tax charge and ongoing losses in Reality Labs amplified negative sentiment. Removing the tax charge, core results appeared robust, though higher expenses pressured margins. AI demand remains intact, and Meta is actively investing in AI under CEO Mark Zuckerberg's direction. The company is positioned to monetize its AI investments over time, and deeper analysis of the quarter suggests underlying performance and trajectory remain sound despite short-term market fears about an AI investment bubble.
Read at 24/7 Wall St.
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