by Dean McElwee, eCommerce leader and author of eCommerce for CEOs
Meta provided a solid quarter result, but the company lost a whopping $125bn in value in post-close trading. So what happened?
Well two things, metaverse and AI. So let’s kick off with the first one.
Metaverse
Yes, this is still a thing, and still an expensive thing. Reality Labs, the division responsible for development bled cash, showing sales for the quarter of only $440m but losses of $3.85bn. It has lost $45bn since 2020, and investors are getting impatient that profit will not be realised, and if it does, will it cover the investment provided to date?
Artificial Intelligence (AI)
The business also highlighted that capital expenditures for 2024 are anticipated to be in the $35bn to $40bn range, an increase from a prior forecast of $30bn to $37bn. This was attributed to infrastructure investments to support their artificial intelligence roadmap (AI).
The challenge is that both of them are capital-intensive when the rest of the business is almost infinitely scalable. R&D costs tons of money and analysts are wondering if there is going to be a payoff. The key here is trust, and it looks like it’s waning. The ability to monetise the product is what’s key here.
