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4 min ago


META'S MARKET-CAP LOSSES WOULD NOW SURPASS $200 BILLION IF STOCK DROP HOLDS

By Emily Bary

Meta Platforms Inc.'s conference call is over, and the stock is down 16.5% in
recent aftermarket activity.

Stock declines accelerated at the call wore on. If current losses carry through
to Thursday's close, the company would see its market value tumble by $208
billion.

That would make for the Facebook parent's second-worst single-day erasure of
market value in its history, as lesser after-hours declines had implied as well.
But a stock drop of that magnitude would also translate to the third-steepest
daily loss of market cap on record for any U.S. company, based on Dow Jones
Market Data statistics.

There have been only three market-cap wipeouts in excess of $200 billion so far.
One of those was experienced by Nvidia Corp. on Friday.


Share

41 min ago


ZUCKERBERG ADDRESSES ESCALATING AI INFRASTRUCTURE COSTS

By Jon Swartz

As Meta Platforms Inc.'s stock losses deepened late Wednesday, Mark Zuckerberg
fielded a flurry of questions from analysts during a conference call.

Zuckerberg was peppered with queries about accelerating capital expenses for
AI-related infrastructure costs -- even as Zuckerberg acknowledged that AI won't
generate significant revenue for several years.

"We build out the inventory first, then we monetize it," Zuckerberg said, in
explaining the years-long path to AI and metaverse profitability. "That's what
I'm focused on this year, and next year."



Share

51 min ago


META'S STOCK DECLINE BUILDS AS EARNINGS CALL GOES ON

By Emily Bary

Meta Platforms Inc.'s stock declines are building as the company's earnings call
wears on.

Shares are down about 15% in after-hours action midway through the Facebook
parent's call. They had been down about 12% shortly after the results came out.

The current declines would translate to a $192 billon loss of market
capitalization if they carry through to Thursday's regular session.

That would make for the company's second-worst daily loss of market
capitalization on record, behind a $232 billion wipeout seen Feb. 3, 2022. It
would also prove to be the fourth-worst daily market-value drop for any U.S.
company, based on a tally from Dow Jones Market Data.


Share

1 hour ago


META CONFERENCE CALL (SO FAR) IS ALL ABOUT AI

By Jon Swartz

AI was the clear star of Meta Platforms Inc.'s earnings conference call late
Wednesday.

Meta Chief Executive Mark Zuckerberg focused most of his comments on AI and the
metaverse. Though the financial rewards will be immense, it will take several
years of investments to get there, he said. For now, it will aid in cost savings
and better communication within Facebook's suite of apps, Zuckerberg added.

"It is interesting to see how these two themes come together," Zuckerberg said.
"Glasses are ideal" to take advantage of Reality Labs' platform work, he said.

He also noted good improvement in video, Reels, and WhatsUp.


Share

1 hour ago


NOTHING 'THESIS-CHANGING' IN THESE EARNINGS, SAYS BAIRD

By Emily Bary

While there are a few "issues" coming out of Meta Platforms Inc.'s latest
earnings, none look to be "thesis-changing," according to Baird analyst Colin
Sebastian.

Yes, Meta beat expectations with its latest results, but it didn't top the high
end of its outlook range, perhaps making investors wonder "are the big beats
over?"

And Sebastian said Meta's second-quarter outlook essentially matched the
consensus view, "although investors were hoping for upside, and this is probably
stoking fears of either the pullback from China-based advertisers and/or some
softness in retail/e-commerce spend."

Meta also boosted its spending outlook for the full year, and Sebastian said
"the Street was still hoping for faster growth with limited expense impact."

That said, Sebastian continues to hold an outperform rating on Meta shares.


Share

1 hour ago


SELL THE NEWS? CHIP STOCKS FALL DESPITE META'S UPPED SPENDING OUTLOOK

By Emily Bary

Meta Platforms Inc. boosted its capital-spending forecast for the year and now
expects to spend $35 billion to $40 billion, up from a prior outlook of $30
billion to $37 billion.

That bodes well for the companies set to haul in money from the Facebook
parent's ever-growing budget for artificial-intelligence hardware and other
technologies. But were chip-sector investors expecting an even bigger boost, or
are they simply "selling the news" of the heightened forecast?

That's the question as shares of Advanced Micro Devices Inc. fell about 1% in
Wednesday's extended session and as Nvidia Corp. shares dropped 1.6%.

But not all of the usual Meta spending beneficiaries were seeing their shares
fall in the extended session. Arista Networks Inc.'s stock was up 1.3%, for
example.



Share

1 hour ago


ONE ANALYST'S IMMEDIATE TAKE ON META: AD GROWTH IS BACK ON TRACK

By Jon Swartz

Longtime social media analyst Debra Aho Williamson gleaned some positive news
from Meta Platforms Inc.'s fiscal first-quarter results on Wednesday.

Revenue growth is back on track, especially in advertising, said Williamson,
chief analyst at Sonata Insights.

One key factor behind the strong ad revenue growth was the Advantage+ suite of
ad products, which relies on AI to improve ad performance. Reels is another
revenue driver, she said. That business has improved steadily and stands to make
further gains over the rest of the year as the turmoil over a potential TikTok
ban plays out. Facebook is a third factor: It continues to perform strongly even
at more than 20 years old.

On the metaverse front, Meta reported yet another round of large losses at
Reality Labs ($3.8 billion) on just $440 million in revenue.


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1 hour ago


META'S STOCK DROP COULD WIPE $150 BILLION FROM MARKET CAP

By Emily Bary

If Meta's after-hours losses carry through to tomorrow's regular-session close,
the stock could log its worst performance in more than a year.

Meta shares are down more than 12% in Wednesday's aftermarket action, which
would translate to their steepest single-day percentage decline since Oct. 27,
2022 if that action holds up in Thursday trading, according to Dow Jones Market
Data. Meta shares dropped 24.6% in that October 2022 episode.

That decline would shave about $150 billion from Meta's market capitalization.


Share

1 hour ago


META'S FULL-YEAR CAPITAL EXPENSES RATTLE INVESTORS

By Jon Swartz

The quarterly financial bar for Meta Platforms Inc. was exceedingly high, and
Facebook's parent company met most of them with better-than-expected revenue and
net income on Wednesday.

Revenue guidance was OK, too, but what's really rattling investors is a hike in
full-year capital expenses. Investments in AI research, data centers and other
costs pushed the range to $35 billion to $40 billion, from a previous range of
$30 billion to $37 billion.

The year of efficiency no longer really applies, but escalating costs are
another thing, say Wall Street analysts.


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2 hours ago


META'S STOCK IS PLUNGING ON HIGHER EXPENSES, SO-SO REVENUE GUIDANCE

By Jon Swartz

Meta Platforms Inc.’s stock is plunging 11% in extended trading Wednesday,
minutes after the company posted quarterly results that included higher expenses
and so-so revenue projections.

Meta reported fiscal first-quarter net income of $12.4 billion, or $4.71 a
share, compared with net income of $5.7 billion, or $2.20 a share, in the same
quarter a year ago. Revenue soared 27% to $36.46 billion from $28.65 billion in
the year-ago quarter.

Analysts surveyed by FactSet had expected on average net income of $4.32 a share
on revenue of $36.1 billion.

Meta is forecasting $36.5 billion to $39 billion in second-quarter revenue.
FactSet analysts are projecting $38.25 billion.

Shares of Meta have soared 39% this year, while the broader S&P 500 index is up
6%.


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2 hours ago


WHY RAYMOND JAMES NAMED META'S STOCK ITS TOP INTERNET EARNINGS PICK

By Emily Bary

Meta is Raymond James' top pick in the internet sector for this earnings season,
and artificial intelligence is a big part of the reason why.

The Facebook parent company plans to have the equivalent computing power of
600,000 Nvidia H100 graphics processing units, which Raymond James' Josh Beck
said is "the most credible (and durable in our view) AI monetization theme
across our coverage."

Meta's AI work is improving the amount of time people spend on products like
Reels, and it's also making advertisements more relevant.

In the short term, Beck is upbeat because he's gotten positive advertiser
feedback on Meta's Advantage+ and Reels performance. And over a longer span, he
said "the durability of AI recommendation tailwinds" is underappreciated by
investors.


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3 hours ago


WHY META'S EARNINGS REPORT WILL LOOK A LITTLE DIFFERENT THIS TIME

By Emily Bary

Longtime perusers of Meta's earnings reports will notice a change this time
around.

Meta plans to stop reporting daily active users and monthly active users for its
Facebook platform, and it also will stop giving out counts of monthly active
people for its Family of Apps.

It will still provide daily active people for its Family of Apps.

Investors will get some new metrics as well. Meta intends to start posting
year-over-year changes in advertising impressions and the average price per ad
on a regional level.

Meta isn't the only company making a reporting switch. Netflix announced last
week that it will stop giving out regular subscriber-count updates after this
year.


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3 hours ago


META'S STOCK SLIDES INTO THE RED AS EARNINGS REPORT NEARS

By Tomi Kilgore

Shares of Meta Platforms Inc. slid into the red after the open, and have started
weakening again as the release of the social-media platform's first-quarter
earnings report neared.

The stock was up as much as 2.8% moments after the opening bell, then started a
selloff that took it down as much as 2.3% just after noon Eastern.

After recovering slightly, to be down just 0.6% at about 1:43 p.m., the weakness
resumed with the stock down 1.2% a little less than 90 minutes before the
closing bell.

Last quarter, Meta's released its earnings report at 4:05 Eastern.


FactSet, MarketWatch

Share

4 hours ago


IS META HEADED FOR PEAK GROWTH?

By Emily Bary

Meta could post 26% advertising revenue growth for the first quarter, according
to CFRA analyst Angelo Zino's estimates. That "will likely mark a peak growth
rate," he said.

"This compares to a 24% pace in the second half, and we partly attribute the
strong growth rate to lapping a low bar a year ago," he added.

That said, Zino is still upbeat about Meta's ad trends going forward. He expects
the company to benefit from enhanced artificial-intelligence initiatives as well
as spending from China advertisers.

"We note continued strong advertiser demand in online commerce and gaming," Zino
said.


Share

4 hours ago


META'S REGULATORY RISK IS 'TRICKY' TO GAUGE

By Emily Bary

Large technology companies face growing regulatory pressures, and Roth MKM
analyst Rohit Kulkarni says it's hard to assess the impact of new rules in
Europe.

"The regulations require stricter user consent for data collection and ad
targeting," he wrote. "Recently, Meta has been criticized for its “pay for
privacy” approach, which can be viewed as manipulative."

Kulkarni called the situation in Europe "an unknown risk that's fairly tricky to
put a framework around."

Analysts have also flagged regulatory concerns for Alphabet Inc., which reports
earnings Thursday afternoon.


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5 hours ago


TRACKING META'S AI SPENDING

By Emily Bary

Meta's earnings offer a gauge on the health of the digital-advertising market.
They also provide a view on the state of AI-hardware spending.

That's because Meta is investing heavily in AI, with "plans to continue building
data centers ahead of demand and...a significant need for servers," according to
Mizuho analyst James Lee.

To that end, Lee sees the possibility that Meta's capital expenditures for the
year could come at the high end of the company's guided range, which has been
$30 billion to $37 billion. But the company likely has some flexibility in
operating expenses to help offset that, he added.


Share

6 hours ago


META'S LAST EARNINGS MADE THE RECORD BOOKS. IS AN ENCORE IN STORE?

By Emily Bary

Meta's earnings report Wednesday afternoon has a lot to live up to.

Specifically, these results follow a set three months back that drove a historic
boost to Meta's market cap. Shares of the Facebook parent company rose 20% in
the session after that last report, resulting in a $204.5 billion lift to Meta's
market cap.

That wasn't only the biggest ever one-day increase to Meta's valuation. It was
also the largest such gain for any U.S. company on record.

Meta shares have gained following four of the company's last five earnings
reports, and three of those rallies have brought double-digit percentage gains.


Share

7 hours ago


'THERE IS REALLY NO BEAR CASE RIGHT NOW' FOR META

By Emily Bary

Wall Street is very upbeat about Meta Platforms Inc., so much so that "there is
really no bear case right now" that Mizuho desk-based analyst Jordan Klein hears
about the stock.

The question now for Meta "really becomes how much can they beat" with the
quarterly results and outlook due out later Wednesday, Klein wrote in a note to
clients earlier this week.

Mizuho saw positive advertising channel checks for Meta and sees upside to both
the results and "conservative" second-quarter estimates.

"On the competitive front, we believe that concerns relating to TikTok Shops
appear to be premature," Klein added.


Share

8 hours ago


A LESSON FROM NETFLIX?

By Emily Bary

What does Meta need to show investors Wednesday to drive its stock higher?
Netflix may offer some clues.

Evercore ISI analyst Mark Mahaney noted that Netflix shares dropped 9% after the
company posted a "beat-and-bracket" quarter. That "likely illustrates the risk"
for Meta's stock heading into earnings.

Meta shares are up 43% so far this year and have outperformed Netflix shares
over that span, raising the pressure, though Mahaney acknowledged that Meta's
stock seems to have more valuation support than Netflix's.

But the "basic point" is that "a clear beat and raise may be required for Meta
to simply maintain its current price level," he added.


Share

10 hours ago


META'S BEEN AMONG THE MOST 'MAGNIFICENT'

By Emily Bary

The large technology grouping known as the Magnificent Seven has lost some
luster this year, but Meta's stock has remained a bright spot.

Last year, all seven members of the Magnificent Seven saw stock gains, but so
far this year, Tesla and Apple shares are in the red.

Meta's stock, though, has continued its strong performance, and it's up 40% thus
far in 2024, building on a 194% rally seen in 2023. The stock is the second best
performer among the Magnificent Seven on a year-to-date basis: Only Nvidia, with
its shares up 66%, is doing better.



Share

10 hours ago


EXPECTATIONS FOR META HAVE RISEN. IS THE BAR TOO HIGH?

By Emily Bary

Expectations for Meta have moved higher as this year's gone on, with analysts
now modeling $36.1 billion in revenue for the first quarter. As of the end of
January, analysts had been looking for $33.9 billion in revenue for the period.

"Our ad checks for [the first quarter] have been mostly positive for Meta
particularly around Advantage+, and the extra day + Easter holidays helps us
gain conviction around hitting 1Q numbers," Bernstein's Mark Shmulik wrote in a
note to clients. "However, we have heard some noise around spend issues/outages
and some volatility around China-based ad buyer spending cadence."

Shmulik asked in a note last week whether the bar was too high for Meta. But the
issues he flagged are likely to show up more in second-quarter guidance if they
end up being meaningful, he noted.

"While near-term expectations are edging higher, we continue to like Meta on a
longer-term horizon, with many more tricks up their sleeves including Click to
Message ads, WhatsApp business messaging monetization, [generative AI] ads and
so on," Shmulik added.


Share

11 hours ago


THE KEY NUMBERS FOR META

By Emily Bary

Analysts expect Meta Platforms Inc. to post adjusted earnings per share for the
first quarter that's nearly double what the company reported a year before.

The FactSet consensus calls for $4.32 in quarterly adjusted EPS, whereas Meta
hauled in $2.20 a year earlier.

Sales are expected to jump as well, though not by the same magnitude. Analysts
are looking for $36.1 billion in overall revenue, up from $28.6 billion a year
before.

Analysts also forecast a rise in capital expenditures to $8.2 billion, whereas
the company recorded $6.8 billion in such spending during the year-earlier first
quarter.


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About this page


META EARNINGS: STOCK DECLINES ACCELERATE AND COULD WIPE OUT $200 BILLION IN
MARKET CAP

Last Updated: Apr 24, 2024 at 6:15 pm ET


FACEBOOK PARENT META PLATFORMS REPORTED FIRST-QUARTER EARNINGS AFTER WEDNESDAY'S
CLOSING BELL. FOLLOW ALONG LIVE AS MARKETWATCH BREAKS DOWN THE RESULTS.

--------------------------------------------------------------------------------



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