Meta Shares Plunge on Rising Concern About AI Spending Spree

Meta Platforms Inc. shares plunged the most in six months after the company raised its spending outlook for the year, reigniting fears that the historic levels of investment that Chief Executive Officer Mark Zuckerberg is making to catch up in the artificial intelligence race won’t pay off.

The social media giant projected full-year capital expenditures of $125 billion to $145 billion, exceeding analysts’ estimates and marking a roughly 7.4% increase from the company’s previous projections in January. Meta said the increase is partly driven by conviction that its AI strategy is working, but the company is also dealing with “higher component pricing” and additional data center costs, Chief Financial Officer Susan Li said Wednesday on a call with investors.