Meta 11% on weak revenue forecast and Zuckerberg’s comments on spending

Yuan Shares of the company fell 11% Thursday morning after the company issued weak revenue guidance. Masked first quarter earnings performance. At 10:20 AM ET, the stock was trading at about $438, compared to a closing price of $493.5 before Wednesday’s earnings report, wiping out about $141 billion in market value.

On Wednesday, Meta reported quarterly earnings of $4.71 per share on revenue of $36.46 billion, beating expectations for earnings of $4.32 per share on sales of $36.16 billion.

Stocks rallied in extended trading on Wednesday after remarks by CEO Mark Zuckerberg discussing spending in the following areas: artificial intelligence and mixed reality have yet to be profitable.

The company expects revenue of $36.5 billion to $39 billion in the second quarter. The midpoint of that range was $37.75 billion, below the average analyst estimate of $38.3 billion.

JPMorgan analysts reiterated their overweight rating on Meta while lowering their price target from $535 to $480, citing the company’s growing investment in artificial intelligence, which they believe could eventually pay off.

“Meter’s virtual ownership of the social graph, strong competitive moat and focus on user experience position it as a sustainable blue-chip company with long-term growth,” they wrote in a note on Thursday.

Bernstein analysts maintained an outperform rating on Meta stock, lowered their price target to $565 from $590, and described the company’s current business strategy as an “expensive offensive” with a long payback period.

“We have uncertainties, but Meta deserves to hold its advanced P/E multiple here,” they wrote in a Wednesday note “without sounding too religious, you either believe Jack or you don’t, and we do”.

Analysts at Barclays maintained an overweight rating on Meta stock and reduced their price target from $550 to $520 in an investor note on Wednesday. They reiterated their confidence in the “long-term name,” though they expect “a bumpy ride through the rest of 2024, as revenue growth slows significantly.”

“If META has proven anything over the years, it’s that its ability to execute during major platform shifts in technology is exceptional, arguably among the best,” the Barclays analysts wrote, adding, “We haven’t heard of Zuckerberg as a key concern.”

—CNBC’s Michael Bloom contributed to this report.