Facebook owner Meta Platforms Inc shares plunged 20 percent late on Wednesday as the social media company missed on Wall Street earnings estimates and posted a weaker-than-expected forecast.
Meta said it faced hits from Apple Inc’s privacy changes to its operating system, which have made it harder for brands to target and measure their ads on Facebook and Instagram, and from macroeconomic issues like supply-chain disruptions.
The after-hours slump in Meta shares vaporized US$200 billion worth of its market value, with another US$15 billion in value lost from peers Twitter Inc, Snap Inc and Pinterest Inc.
Shares of Alphabet Inc, which posted record quarterly sales that topped expectations on Tuesday, were down 1.3 percent.
Meta, which has the second-largest digital ad platform in the world after Google, had previously warned its advertising business faced “significant uncertainty” in the fourth quarter.
The company forecast first-quarter revenue in the range of US$27 billion to US$29 billion. Analysts were expecting US$30.15 billion, according to IBES data from Refinitiv.
Apple’s changes to its operating software give users the preference to allow tracking of their activity online, making it harder for advertisers who rely on data to develop new products and know their market.
The company’s total revenue, the bulk of which comes from ad sales, rose to US$33.67 billion in the fourth quarter from US$28.07 billion a year earlier, beating analysts’ estimates of US$33.40 billion, according to IBES data from Refinitiv.
Net loss from Meta’s Reality Labs, the company’s augmented and virtual reality business, was US$10.2 billion for the full year 2021, compared with a US$6.6 billion loss the previous year. It was the first time the company had broken out this segment in its results.
CEO Mark Zuckerberg had previously warned that the company’s investment in this area would reduce last year’s operating profit by US$10 billion and would not be profitable “any time in the near future.”
The company said on Wednesday it would this year change its stock ticker to “META,” the latest step in its rebranding to focus on the metaverse, a futuristic idea of virtual environments where users can work, socialize and play.
The tech giant, which changed its name in October last year to reflect its metaverse aims, is betting the metaverse will be the successor to the mobile Internet. It did not comment on the price of a deal with Roundhill Investments, which said last month it would stop using the symbol for its Roundhill Ball Metaverse ETF.
Meta’s rebranding comes at a time of increasing scrutiny from lawmakers and regulators over allegations of anticompetitive conduct and over the impacts of how it handles harmful or misleading content across its Facebook and Instagram platforms.
“If you’re putting billions up front and not really expecting return for years, shareholders are going to be hesitant,” ABI Research analyst Eric Abbruzzese said, referring to the metaverse costs.
China’s top chipmaker has warned that breakaway spending on artificial intelligence (AI) chips is bringing forward years of future demand, raising the risk that some data centers could sit idle. “Companies would love to build 10 years’ worth of data center capacity within one or two years,” Semiconductor Manufacturing International Corp (SMIC, 中芯) cochief executive officer Zhao Haijun (趙海軍) said yesterday on a call with analysts. “As for what exactly these data centers will do, that hasn’t been fully thought through.” Moody’s Ratings projects that AI-related infrastructure investment would exceed US$3 trillion over the next five years, as developers pour eye-watering sums
Bank of America Corp nearly doubled its forecast for the nation’s economic growth this year, adding to a slew of upgrades even after a rip-roaring last year propelled by demand for artificial intelligence (AI). The firm lifted its projection to 8 percent from 4.5 percent on “relentless global demand” for the hardware that Taiwanese companies make, according to a note dated yesterday by analysts including Xiaoqing Pi (皮曉青). Taiwan’s GDP expanded 8.63 percent last year, the fastest pace since 2010. The increase “reflects our sustained optimism over Taiwan’s technology driven expansion and is reinforced by several recent developments,” including a more stable currency,
NEW IMPORTS: Car dealer PG Union Corp said it would consider introducing US-made models such as the Jeep Grand Cherokee and Stellantis’ RAM 1500 to Taiwan Tesla Taiwan yesterday said that it does not plan to cut its car prices in the wake of Washington and Taipei signing the Agreement on Reciprocal Trade on Thursday to eliminate tariffs on US-made cars. On the other hand, Mercedes-Benz Taiwan said it is planning to lower the price of its five models imported from the US after the zero tariff comes into effect. Tesla in a statement said it has no plan to adjust the prices of the US-made Model 3, Model S and Model X as tariffs are not the only factor the automaker uses to determine pricing policies. Tesla said
OpenAI has warned US lawmakers that its Chinese rival DeepSeek (深度求索) is using unfair and increasingly sophisticated methods to extract results from leading US artificial intelligence (AI) models to train the next generation of its breakthrough R1 chatbot, a memo reviewed by Bloomberg News showed. In the memo, sent on Thursday to the US House of Representatives Select Committee on China, OpenAI said that DeepSeek had used so-called distillation techniques as part of “ongoing efforts to free-ride on the capabilities developed by OpenAI and other US frontier labs.” The company said it had detected “new, obfuscated methods” designed to evade OpenAI’s defenses
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