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Meta Platforms stock plunges with forecasts

( - Meta Platforms shares plunged in early trading on Wall Street on Thursday, with the company's forecasts fuelling fears of a new round of massive investment.

The owner of Facebook and Instagram announced last night that first-quarter sales had risen by 27% to nearly $36.5 billion.

The Menlo Park, California-based company also more than doubled its net income, to nearly $12.4 billion from $5.7 billion a year earlier.

While the social network has made a "good start to the year", as its CEO and founder Mark Zuckerberg himself admits, the company's forecasts look a little less convincing.

For the second quarter, Meta is aiming for sales of between $36.5 and $39 billion, just short of the market consensus of $38.8 billion.

The company has also raised its capital expenditure forecast for 2024 from $30 to $37 billion to between $35 and $40 billion.

But the big surprise of the quarterly publication does not come from this lower-than-expected forecast, nor from the high level of investment," say analysts at Mizuho.

"The real bombshell comes rather from the fact that Meta will be embarking on a new investment cycle in the near future," they add.

Yesterday, the company announced its intention to step up investment in artificial intelligence (AI) over several years, in order to support its lofty ambitions in this area.

Unlike previous investment cycles, sales growth is not slowing down, and the company now has a flattering track record in terms of monetizing its investments, which exceeds estimates", recalls Mizuho.

Following these announcements, however, the share price fell by 10% on the New York Stock Exchange in early trading on Thursday.

For some analysts, this collapse, which melts the group's market capitalization by almost $120 billion, represents a "buying opportunity", given that the group's fundamentals remain intact.

For the record, the stock had climbed by 25% over the last three months, compared with a rise of just 2% for the Nasdaq.

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