Meta stock sinks as investors caught off guard by AI spending plans – National [Video]

Shares of Meta Platforms sank nearly 15 per cent on Thursday, sparking a selloff in big tech stocks after the social media giant signaled its costly bet on AI would take years to pay off.

The premarket drop was set to erase more than US$180 billion from the company’s market value and triggered a drop of two per cent to five per cent in shares of AI-focused firms Microsoft, Alphabet and Snap.

Meta CEO Mark Zuckerberg, who floored Wall Street last year with his cost-cutting drive, said on a post-earnings call that costs would grow “meaningfully” over the coming years before the company makes “much revenue” from some of its AI products.

That stoked investor fears that Zuckerberg was plunging Meta into another costly endeavor at a time when its augmented and virtual reality business was losing billions of dollars each quarter.

“Investors were caught off guard by higher capital expenditure, exacerbated by slightly …