Despite impressive business results, Meta is still causing investors concern as it continues to "burn money" into future technology fields such as virtual reality and artificial intelligence.
In the latest quarterly financial report, Reality Labs, which develops AR glasses, VR devices and the metaverse platform, continued to record losses of up to 4 billion USD. This figure may sound large at first glance, but in reality it is almost "normal" for Meta.
Since 2021, Reality Labs has caused Meta to lose a total of about 83.5 billion USD, equivalent to an average of 4 billion USD per quarter. This huge investment reflects the company's long-term ambition to build a virtual reality ecosystem, although it has not yet created widespread attraction.
It is noteworthy that even when the metaverse ambition shows signs of cooling down, Meta continues to shift to a no less costly game, which is artificial intelligence. The company's goal is to compete directly with competitors such as OpenAI or Anthropic.
Despite large spending, Meta still has a solid financial foundation. In the first quarter of the year, the company reported a net profit of 26.8 billion USD, up 61% over the same period last year. Revenue also increased by 33%, to 56.3 billion USD, which are figures showing that core business operations are still growing strongly.
However, AI ambitions are causing costs to escalate rapidly. Meta expects to spend from 125 to 145 billion USD on infrastructure and technology in 2026, far exceeding previous forecasts.
According to CEO Mark Zuckerberg, most of the cost increase comes from component prices, especially memory, as the computing demand for AI is increasing.
Along with infrastructure investment, Meta also spends heavily on personnel. Last year, the company recruited more than 50 AI researchers and engineers from competitors to accelerate product development. Recently, Meta launched a new AI model called Muse Spark, which is expected to enhance the user experience.
However, the cost of building and operating modern AI systems is increasing. Meta's Chief Financial Officer - Ms. Susan Li, admitted that the company has repeatedly made unrealistic forecasts, often underestimating the demand for computing capabilities in the future.
These concerns quickly reflected in the market. After the financial report was released, Meta shares fell more than 5% in off-hours trading, showing investor caution in the face of an ambitious spending strategy.
Clearly, Meta is facing a difficult problem: both maintaining profit growth and pursuing long-term technology bets. Success or failure of investments in AR/VR and AI will determine the company's position in the new technology era.
