It’s official: Meta Platforms Inc. plans to spend boatloads on building out artificial-intelligence infrastructure next year, even as it admits that the advertising landscape could be choppy.
The Facebook parent company gave Wall Street the jitters Wednesday when it said the war in the Middle East was contributing to softer ad spending and overall uncertainty, commentary that helped turn Meta shares 3% lower despite better-than-expected earnings that reflected the company’s year of austerity.
“Management continues to exercise cost discipline while investing in key areas such as AI/ML projects and Reality Labs,” said Baird’s Colin Sebastian in a note to clients. “Investors were fearing potential costs at or above $100 billion.” For now, that statement seems like an incremental use of a technology that the company is spending buckets to develop, especially when users already seem pretty prolific uploading videos from their phones.
And Arista Networks seemed the biggest loser, with its shares down over 5%. Wells Fargo analyst Aaron Rakers noted that 26% of the networking company’s revenue last year came from Meta.