Meta's third-quarter 2023 financial report shows the complexity of its growth model. Although revenue exceeded expectations, reaching US$40.6 billion, a year-on-year increase of 19%, the meta-universe division Reality Labs lost as much as US$4.4 billion, causing investors to worry and causing the company's stock price to fall. This financial report reveals the difficult balance between Meta's pursuit of a long-term meta-universe vision and short-term profit pressure.
Meta (formerly Facebook) recently released its third-quarter 2023 financial report. Although its core business performed well, the huge losses in the Meta Universe sector have caused investors' concerns, causing the company's stock price to fall by more than 3% in after-hours trading.
This financial report demonstrates Meta's complex growth dilemma. Data shows that as of September 30, Meta's third-quarter revenue reached US$40.6 billion, a year-on-year increase of 19%, exceeding market expectations of US$40.3 billion. However, the Reality Labs division of the metacosmic business has become a "burden" of performance, with a loss of up to US$4.4 billion in the same period.
Despite facing huge losses, Meta is still confident in the future, and its revenue in the fourth quarter is expected to reach US$45-48 billion, slightly higher than the market's expectations of US$46 billion. It is worth noting that Meta's share price has risen 67% this year, becoming one of the best performing stocks in the S&P 500.
Meta CEO Zuckerberg attributed his performance growth to the application of AI technology. Meta is deploying AI in multiple fields, including developing chatbots supported by large language models, smart assistants for social applications, and smart glasses driven by AI. Although these projects are difficult to make profits in the short term, AI technology has brought significant improvements in advertising positioning and content recommendations.
In the future, Meta plans to further increase AI investment and is expected to significantly increase capital expenditure by 2025. This strategy shows that companies are seeking to transform from the metaverse to AI in search of new growth engines. However, how to balance long-term investment with short-term profit pressure will be an important challenge facing Meta management.
The future development direction of Meta is worth paying attention to. Whether its investment in the AI field can bring significant returns and how to solve the huge losses in the metacosmic business will directly affect the company's long-term development prospects. Whether a successful transformation will be the key to whether Meta can continue to maintain its leading position in the industry.