Meta Platforms (META) exceeded market expectations in its Q1 financial performance, but its outlook for Q2 revenue disappointed investors, leading to a significant drop in stock prices.

In the Q1, Meta Platforms' revenue reached $36.46 billion, a 27% year-on-year increase, slightly higher than the market's expected $36.22 billion. Revenue from the company's core apps group grew by 57% to $17.66 billion, while the operational loss for the future-oriented Reality Labs business was better than expected, narrowing to $3.85 billion from an anticipated $4.5 billion loss.

However, despite the strong performance in the Q1, Meta Platforms' forecast for Q2 revenue fell short of market expectations, causing the stock price to drop by 12% at the start of the earnings call, further declining to 16%. CEO Mark Zuckerberg emphasized the company's continued focus on the development of the metaverse and artificial intelligence technologies.

He announced that despite reallocating many resources to artificial intelligence, significant investment would still be made. Capital expenditures for 2024 are expected to reach $35 billion to $40 billion, primarily to support infrastructure development for artificial intelligence. However, such large-scale investment may exert pressure on the company's profitability in the short term.

Additionally, Meta will continue to increase its investment in the metaverse, raising capital expenditures to $35 billion to $40 billion to support the development path of artificial intelligence. Although holographic display technology for augmented reality (AR) glasses remains a long-term goal, there has been a significant increase in demand for fashion-oriented AI glasses in the market.