Meta’s stock plunged 8% Thursday, continuing its historic losing streak after lackluster earnings and revenue projections dimmed investor confidence in CEO Mark Zuckerberg’s AI vision.
The company, which is pushing more premium social media services to fund its eye-watering AI bills, could enter negative free cash flow for the first time since 2012, as it gears up to double its compute capacity. Zuckerberg, who railed against “centralized power” in AI, suggested Meta could lease out compute to raise revenues, while its models continue to underwhelm. Meanwhile, Microsoft’s shares jumped on faster cloud growth.
Meta has little record of building beyond its core business, and investors should decide whether its AI push represents “diversification or distraction,” an analyst told the BBC.
