Shares of Meta Platforms plunged 7.5% in Thursday’s trade on October 22, to reach $644.30 apiece as investors worried about the social media giant’s aggressive bet on artificial intelligence (AI), overshadowing better-than-expected September-quarter results.
During its quarterly earnings report on Wednesday, the parent company of Facebook and Instagram raised its capital spending plans for the year and announced a new class of non-voting shares that could ultimately be used to help fund acquisitions and other expenses.
Meta said it expects full-year capital expenditure (capex) to range from $135 billion to $145 billion, raising the lower end of its previous forecast of $130 billion to $145 billion.
The spending will support the company’s sweeping plan to put its Muse AI agent at the heart of its AI strategy and turn a technology that has gained traction largely among businesses automating coding into a consumer-focused revenue generator.
The moves underscore Meta’s confidence that its already substantial AI investments are beginning to pay off. After struggling to convince investors to accept its ballooning costs, Meta has made progress with its technology in recent months, particularly through its new AI agent, Muse. CEO Mark Zuckerberg cited that progress as a reason to continue investing aggressively.