![]() ![]() The FTC also sought to block Meta’s acquisition of virtual reality company Within but the deal closed in February. The company has been in the crosshairs of the Federal Trade Commission, which has alleged Meta has engaged in anti-competitive activity and gained a monopoly through its purchases of Instagram and WhatsApp. Risks Facing Meta StockĪntitrust regulations pose a threat to Meta. ![]() “Right now is not the right time to invest as aggressively in the metaverse,” says Mogharabi, noting that Walt Disney DIS has shuttered its division devoted to metaverse development and Microsoft has also ended much of its virtual reality efforts. It was the last product area Zuckerberg addressed in his remarks to analysts and he referred to it as a “longer term” priority. Hype around the money-losing virtual world known as the metaverse-which had been the company’s primary focus in recent years, and into which it has poured billions and even renamed itself after-has diminished. “We also think it’s going to enable many new products and additional transformations within our apps.” “AI is the foundation of our discovery engine and our ads business,” Zuckerberg told analysts following the release of its fourth-quarter results in February. It’s created a new product team devoted to generative AI that uses machine-learning algorithms to produce text, visual content, and audio that appear to be made by humans. The company now is concentrating on its AI systems to improve engagement and advertising effectiveness, and drive profitability on its Facebook and Instagram platforms, keeping it competitive with the likes of Microsoft MSFT and Alphabet GOOG. Artificial Intelligence Is the New Metaverse His firm bought more in 2022 as the stock slid into the $90 range. Weitz has owned Meta stock since the first quarter of 2018, when it was trading between roughly $160 and $187 per share. “It’s not wildly cheap but if they really have gotten a little bit of spending discipline and this is the year of efficiency as Mark Zuckerberg has said, then stock buybacks can do wonders.” “It’s an incredible moneymaking machine,” says Wally Weitz, co-chief investment officer of Weitz Investment Management, noting its $41 billion in cash and relatively little debt. Capital spending was lowered to $30 billion-$33 billion, from $34 billion-$37 billion. It projects restructuring charges of $1 billion in the year, down from a prior estimate of $2 billion after recording some of the charges in the fourth quarter. It now sees total expenses for the full year 2023 in the range of $89 billion to $95 billion, from a previous forecast of $94 billion to $100 billion. Meta expects to report first-quarter revenue in the range of $26 billion to $28.5 billion. Declaring 2023 as Meta’s “year of efficiency,” Zuckerberg outlined further cost-cutting measures, including 10,000 more layoffs in addition to the 11,000 previously announced. Investors also welcomed a $40 billion increase to its share repurchase program. Meta benefited in the three months ended March 31 by reporting better-than-expected fourth-quarter results and presenting a rosier outlook for first-quarter revenue. ![]() Meta’s changes are already showing up in results. “After that we should be able to profitably grow Reels while keeping up with the demand that we see,” chief executive Mark Zuckerberg said. Measured by revenue generated by minute watched, Reels is currently unprofitable but the company expects it to break even by the end of this year or early next year. Reels plays on Facebook and Instagram have more than doubled in the past year, and the number of people resharing Reels has more than doubled in the past six months, according to the company. Meta is especially focused on incorporating ads into its fast-growing short-form video content known as Reels, using artificial intelligence to target customers with more-personalized ads based on their behavior and the context of the sites they visit. In addition, Apple has tinkered with its privacy feature to allow advertisers more access to data after certain thresholds are met, which has somewhat softened the impact from its original version. ![]()
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