Meta has beaten analysts' expectations and the stock is down 15%. Go figure!
Meta reported Q1 2024 Revenue of $36.46 billion (vs. expected $36.15 billion) with a +0.8% beat - see Figure 1.
However, Q2 2024 revenue guidance missed Wall Street expectations by only 1.3% and this is apparently the main reason for the price drop - see Figure 2.
Importantly, Meta provides a revenue range as guidance for the next quarter.
An additional reason cited in the media is higher CAPEX. Wall Street expected CAPEX in 2024 at $34.89 billion.
CFO Outlook Commentary:
“We anticipate our full-year 2024 capital expenditures will be in the range of $35-40 billion, increased from our prior range of $30-37 billion as we continue to accelerate our infrastructure investments to support our artificial intelligence (AI) roadmap. While we are not providing guidance for years beyond 2024, we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts.”
All in all, my gut feeling is that we are just in the middle of a mean-reverting stock market correction – so Meta has just joined the harder falling stocks because it had previously grown significantly. Missed guidance or higher CAPEX was just a trigger and/or an excuse.
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