Meta shares plummet near 10% after earnings, Google skyrockets
The Meta AI logo. (Image: Reuters/Dado Ruvic)
NEW YORK: Meta shares tumbled nearly 10 per cent at the opening on Thursday (Apr 30) on Wall Street, while Google-parent Alphabet surged more than 6 per cent.
The fluctuations came a day after the tech rivals reported quarterly earnings and showed starkly different investor reactions for their costly bets on artificial intelligence.
Amazon and Microsoft, which also posted earnings on Wednesday, saw their shares fall over AI concerns by 2 per cent and 3.7 per cent, respectively.
The earnings came as AI titans pump billions of dollars into cloud computing and artificial intelligence, vying to lead in a technology that they insist will transform all aspects of life.
Investors have broadly lauded Google's success in pivoting to AI and its solid revenue across major divisions.
The tech giant reported a profit of US$62.6 billion on revenue just shy of US$110 billion, easily eclipsing the same period a year earlier and beating market expectations.
Social media behemoth Meta, meanwhile, sent tremors through its results by announcing that expenses notched up to US$33.4 billion as it chases "superintelligence", including a hiring spree for top AI talent.
The company also increased its projected capital spending - mainly for data centres - for the year by US$10 billion, to a new range of US$125 billion to US$145 billion.
Unlike Amazon, Microsoft and Google, which sell AI capabilities to cloud clients, Meta's AI investments are not directly tied to a revenue stream.
The company has moved to rein in costs to help fund its AI ambitions, announcing last week that it would cut roughly 8,000 jobs and leave 6,000 open roles unfilled.
A few minutes into trading, the Dow Jones Industrial Average was up 0.8 per cent at around 49,241. The broad-based S&P 500 gained 0.2 per cent to about 7,151, while the tech-rich Nasdaq Composite Index was flat at around 24,665.
