Despite the anticipation for the company’s most recent Q3 earnings, Meta (META) has fallen nearly 5% Thursday as investors have expressed concern about the stock in 2025. Indeed, the stock price drop is likely connected to increased AI spending that has driven some concern on Wall Street.
The earnings report had come in weaker than many experts had projected. Specifically, declining user numbers forr the Wednesday report had caught the eye of many. That figure, and questions regarding its trajectory have created the perfect storm that knocked the stock back significantly as the week nears its close.
Entering earning season, Meta looked to be in a positive place. The company had announced its Orion augmented reality glasses, looking to get a jump on the emerging market. Moreover, it has continued to integrate AI into its plethora of social media platforms. The move was looking to drive continued interest amid the booming sector.
Yet, that all fell flat with a rather disappointing earnings report. As a result, Meta stock has fallen nearly 5% Thursday as investors are showing some concern for the company’s trajectory in 2025. Although the company did have some promising revenue figures, the market appeared underwhelming at best.
The report showed 3.29 billion daily active users in Q3. Although that is up 5% from 2023; it was below the 3.31 billion projected by analysts. Additionally, the company noted that it is expecting to increase infrastructure expenses in 2025. that created some concern regarding how capital expenditure had already increased.
For 2024, Meta raised the figure between $38 billion and $40 billion. Moreover, that was already boosted from $37 billion to $40 billion prior. Now, they are projecting that to once again increase due to the AI investment that the company is making.
CEO Mark Zuckerberg said he expects the company to “continue investing significantly,” in the AI sector. It does not appear as though the continued funding has inspired investors, as demand and results don’t appear to match the commitment. Still, Meta reported $6.03 earnings per share, above the $5.25 expected. Furthermore, they reported $40.59 billion in revenue, which also beat the $40.29 billion expected.
