Meta on Wednesday reported a 27 percent increase in revenue and profit that more than doubled in the first quarter, as the company said it planned to spend billions of dollars more than expected on infrastructure to support its artificial intelligence efforts.
Revenue for the company, which owns Facebook, Instagram, WhatsApp and Messenger, was $36.5 billion in the first quarter, up from $28.6 billion a year ago and slightly above Wall Street estimates of $36.1 billion, according to data compiled by FactSet. Profit was $12.4 billion, up from $5.7 billion a year earlier.
“It’s been a good start to the year,” said Mark Zuckerberg, Meta’s chief executive, referring to the company’s A.I. efforts and “healthy growth across our apps.”
But Meta’s efforts on A.I., which require substantial computing power, come with a lofty price tag. The Silicon Valley company said it planned to raise its spending forecast for the year to $35 billion to $40 billion, up from a previous estimate of $30 billion to $37 billion. The move was driven by heavy investments in A.I. infrastructure, including data centers, chip designs and research and development costs.
Further, the company said it anticipated slightly lower than expected revenue in the second quarter compared to analysts’ expectations, spooking investors and sinking the stock price in after-hours trading.
Meta’s shares fell more than 11 percent on Wednesday afternoon after ending regular trading at $493.50.
Meta has increasingly positioned itself as poised to capitalize on artificial intelligence, a technology that has seen a surge in interest after an explosion of generative A.I., which can produce text, video, audio and images. Meta has for years invested in engineers and infrastructure to drive A.I. advancements, some of which have improved its advertising systems and bolstered its revenue.
After OpenAI released the ChatGPT chatbot in 2022, Mr. Zuckerberg refocused Meta to plug A.I.-powered products into nearly every corner of his empire, from Instagram’s and Facebook’s search tools, to image-generation software to smart glasses. Last week, Meta unveiled new versions of its A.I.-powered smart assistant software that it has incorporated across its apps.
Mr. Zuckerberg has also spent billions investing in graphics processing units, or GPUs, the chips that can carry out the complex calculations to power artificially intelligent systems.
But Meta also continues to burn billions of dollars chasing Mr. Zuckerberg’s vision of the immersive digital world of the metaverse. Reality Labs, Meta’s hardware division, lost roughly $3.8 billion in the first quarter while making $440 million in revenue, spending heavily to build virtual and augmented reality goggles and software, as well as the company’s Horizon operating system for V.R. headsets.
Meta has been in perpetual transition for the past four years. After a surge in users and activity during the initial Covid-19 lockdowns, the company’s business was battered by a decline in the digital advertising market in 2022. Last year, Mr. Zuckerberg instituted a cost-cutting program in a “year of efficiency,” culling roughly a third of the company’s work force and flattening layers of middle management.
Revenue has since surged, buoyed by a rebound in the ad market and more people regularly returning to one or more of the company’s apps.
