Meta Lost $100 Billion in Market Value Amid Zuckerberg's Attempts to Sell an AI Concept

Meta’s stock fell 9% during trading on July 30, causing the company’s market capitalization to drop by more than $100 billion, according to the Financial Times (FT). The newspaper notes that remarks by CEO Mark Zuckerberg in defense of his costly efforts to transform the social media giant into a leading AI company failed to convince investors.

On July 29, speaking following the release of Meta’s second-quarter results, Mark Zuckerberg introduced the concept of personal AI agents that will carry out users’ tasks around the clock, assisting with health, hobbies, personal finances, and careers. He stated that consumer agents—whose launch plans the FT reported on in May—will become “the foundation for the next wave of products and revenue streams [Meta] in the coming months and years,” as well as “an extremely important and massive market.”

Zuckerberg insisted that investments in AI would benefit the company's core advertising business and create new sources of revenue for it.

However, the company’s revenue forecast disappointed investors: Meta expects revenue for the current quarter to range from $61 billion to $64 billion, or an average of $62.5 billion. Analysts surveyed by LSEG had forecast $63.15 billion, according to CNBC. Meta also narrowed its full-year capital expenditure forecast to a range of $130 billion to $145 billion, down from the previous range of $125 billion to $145 billion. The company estimated its capital expenditures for the second quarter at approximately $31 billion.

Meta's free cash flow—a key metric for investors—fell 91% in the second quarter to $784 million, compared with $8.5 billion in the same period last year.

“I understand that this is a major investment and a big gamble. We can see that the technology works. We’re pleased with the trajectory of the [AI] lab. I’m excited about the upcoming products. And we believe this will be a game-changer,” Zuckerberg said following the earnings call.

Since the start of the year, Meta’s stock has fallen by nearly 20%. Nevertheless, most Wall Street analysts view the company’s outlook positively: 64 analysts recommend buying Meta stock, while seven recommend holding it. There are no sell recommendations for Meta. The average price target—$800 per share—implies a 36.6% increase in the company’s stock price relative to the previous close.

The company’s progress in the field of artificial intelligence has been under close scrutiny ever since Meta’s Llama large language models began to lag behind those of OpenAI, Anthropic, and Google last year, the FT notes. However, Meta is in preliminary talks to lease its computing power to the AI lab Anthropic for up to $10 billion. In this way, the company plans to enter a market dominated by Amazon and Google.

This article was AI-translated and verified by a human editor