Benzinga - by Zaheer Anwari, Benzinga Contributor.
- Despite a strong first-quarter earnings report, Meta's stock value significantly declined.
- $5-10 billion investment in AI technology for 2024.
The company reported earnings of $4.71 per share, surpassing the $4.32 expectation. However, the announcement of an aggressive investment plan ranging between $5-10 billion in AI technology for 2024 sent shares tumbling by 14% at Thursday's market opening, erasing about $190 billion from Meta's market value.
This move aims to enhance Meta's advertising products and social media platforms with advanced AI, including improvements to ad-buying systems and the introduction of AI-driven features like chat assistants.
Meta's pivot towards AI signifies its ambition to improve user experiences and advertising outcomes, but it leaves the market pondering the implications of its future stock growth.
The stock has had a turbulent year. It hit new highs in April, jumping 50% for 2024. However, the recent announcement led to a big drop, with gains for the year now sitting at just 21%.
Yet, over the long term, Meta's shares show significant gains, rising an impressive 190% in 2023.
The question now is whether the $400 round number will hold as critical support should this decline continue. This level hovers just above the 2021 peak, setting another support level at $384. If Meta finds its footing here, it could hint at a possible comeback, potentially marking the resumption of its long-term bullish trend.
After the closing bell on Wednesday, April 24, the stock closed at $493.50, trading down by 0.46%.
This article is from an unpaid external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.
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