Meta Shares Fall Amid Q3 Earnings Beat and User Growth Miss

Topline

Shares of Meta Platforms fell by more than 3% as the company reported earnings and revenue that beat Wall Street expectations Wednesday.

Key Facts

Key Background

Meta, which owns Facebook, Instagram, WhatsApp and Threads, is betting big on AI as it gears up to train the latest version of its flagship AI model Llama, which CEO Mark Zuckerberg said was “well into development” at Wednesday’s third-quarter earnings call. “At this point, I’d rather risk building capacity before it is needed rather than too late,” Zuckerberg said on the second-quarter earnings call in July. Meta AI, the company’s flagship chatbot, has more than 500 million monthly active users, he said on Wednesday’s call. The Ray-Ban Meta smart glasses, a surprise hit for the company, is a top selling product in Ray-Ban stores across Europe, the Middle East and Africa, Ray-Ban parent EssilorLuxottica reported earlier this month. Meta’s AI investments could also help boost user engagement on its social media apps, Truist Securities analysts wrote ahead of earnings release. On the social media front, Threads, Meta’s X competitor, reached almost 275 million users about a year after its debut, Zuckerberg said.

Big Number

$1.5 trillion. That’s Meta’s market capitalization, which makes the company one of eight trillion-dollar companies in the world.

Forbes Valuation

Co-founder and CEO Mark Zuckerberg, who ranked No. 3 on this year’s Forbes 400 list of richest Americans, is worth an estimated $207.5 billion according to Forbes’ real-time tracker, making him one of four people in the world whose net worth surpasses $200 billion. Nearly all of his fortune is tied up in Meta shares and its performance. Zuckerberg’s net worth has more than tripled from an estimated $64.4 billion last year.

What To Watch For

Meta is reportedly developing its own AI search engine in an effort to reduce its reliance on Google Search and Microsoft’s Bing, The Information reported. The search engine is designed to help supply answers to queries made to the Meta AI chatbot.

Surprising Fact

In what has now been dubbed “Grubgate,” Meta terminated about two dozen employees this month for abusing a $25 Grubhub meal credit. The employees reportedly used the credit to purchase non-food items like laundry detergent and wine glasses.

Further Reading

Instagram Introduces New ‘Sextortion’ Guardrails For Child Safety—Here’s What To Know (Forbes)

How 2 Students Used The Meta Ray-Bans To Access Personal Information (Forbes)