While many companies are looking for ways to profit from artificial intelligence (AI), Meta Platforms (NASDAQ: META) has flipped the narrative on its head. The company has long used sophisticated algorithms to surface relevant content and direct targeted advertising to users of its social media platforms. The advent of generative AI has taken that approach to the next level. When Meta reported its quarterly results after the market close on Wednesday, one thing was crystal clear. The company continues to ...

As mega cap earnings are looming large starting on Wednesday, Meta, Microsoft, Tesla, Thursday brings us Apple, you all know by now you got to wait a while for Nvidia. But these are the ones right now, Bin that matter. They always matter. I feel like maybe they matter even more.Why. Because tech has lagged so much to start the year. nowhere to be seen on the best performing sectors list where energy leads the way and materials is next and industrials follow that and then on and on and on and then you finall ...

Core Insights - U.S. stock futures are trading slightly lower, indicating a cautious market sentiment ahead of key earnings reports [1] Company Earnings Expectations - Delta Air Lines Inc (NYSE:DAL) is expected to report quarterly earnings of $1.53 per share on revenue of $14.73 billion, with shares rising 0.1% to $71.06 in after-hours trading [1] - JPMorgan Chase & Co (NYSE:JPM) is anticipated to post quarterly earnings of $4.95 per share on revenue of $46.20 billion, with shares increasing 0.2% to $324.97 in after-hours trading [1] - Concentrix Corp (NYSE:CNXC) is projected to report quarterly earnings of $2.91 per share on revenue of $2.54 billion, with shares gaining 1% to $40.90 in after-hours trading [1] - Bank of New York Mellon Corp (NYSE:BK) is expected to report quarterly earnings of $1.98 per share on revenue of $5.14 billion, with shares falling 0.3% to $120.25 in after-hours trading [1] Company Restructuring - Meta Platforms Inc. (NASDAQ:META) plans to cut about 10% or more jobs in its Reality Labs division to focus on next-generation AI initiatives, with potential layoffs announced as early as Tuesday [1]

Core Insights - Meta is planning to announce layoffs this week, which will impact its metaverse projects as the company reallocates resources towards artificial intelligence development [1] Company Impact - The layoffs are expected to affect Meta's ongoing work on the metaverse, indicating a strategic shift in focus towards artificial intelligence [1]

Core Viewpoint - Economist Dean Baker criticizes Meta Platforms Inc. CEO Mark Zuckerberg's $77 billion investment in the Metaverse, viewing it as a significant economic failure with social costs rather than just a corporate loss [1][2]. Investment Impact - The $77 billion investment in the Metaverse is seen as a diversion of talent and resources from more productive uses, which Baker argues has broader implications for society [3][4]. - Baker emphasizes that the resources tied up in the Metaverse project, including software engineers and physical inputs, could have been utilized for more beneficial purposes, such as affordable housing in the Bay Area [4]. Broader Economic Context - The failed Metaverse investment is particularly relevant as major technology firms are now investing heavily in artificial intelligence, which is reshaping the economy and absorbing top engineering talent [5][6]. - Baker warns that the AI investment boom is straining power grids and complicating climate goals, raising questions about the effectiveness of capital stewardship by leaders like Zuckerberg [6].

Core Viewpoint - Economist Dean Baker criticizes Meta Platforms Inc. CEO Mark Zuckerberg's $77 billion investment in the Metaverse, arguing it represents not only a corporate loss but also a broader economic failure with significant social costs [1][2]. Investment Analysis - The $77 billion investment in the Metaverse is viewed as a substantial misallocation of resources, diverting talent and physical assets from more productive uses [3][4]. - Baker emphasizes that the resources tied up in the Metaverse project could have been utilized for more beneficial purposes, such as affordable housing in the Bay Area [5]. Economic Implications - The failed Metaverse investment is particularly relevant as major tech firms are now investing heavily in artificial intelligence, which is reshaping the economy and straining power grids [6]. - Baker questions whether Zuckerberg has become a more disciplined steward of capital since the Metaverse era, with a potential answer expected by 2026 [6]. Company Adjustments - Meta announced a reduction of up to 30% in its 2026 Metaverse budget, which constitutes 50% to 60% of its Reality Labs division spending, following cumulative losses of $70 billion since 2021 [7]. - The company is also facing criticism for its increasing AI investments, projected to reach $100 billion by 2026, which will require significant external financing [7]. Stock Performance - Meta shares experienced a decline of 0.69% on Monday, closing at $658.69, and a further drop of 0.24% overnight, indicating mixed performance in the market [8].

Core Viewpoint - Meta Platforms, Inc. (NASDAQ:META) is recognized as a top AI and technology stock by hedge funds, with analysts maintaining a positive outlook on its stock performance due to strategic cost management and earnings growth potential [1]. Group 1: Analyst Ratings and Price Objectives - TD Cowen analyst John Blackledge has maintained a "Buy" rating on Meta's stock with a price target of $810.00, supported by the company's strategic cost management and earnings growth potential [1]. - Morgan Stanley has reduced its price objective for Meta's stock from $820.00 to $750.00 while maintaining an "Overweight" rating, citing the company's ability to leverage data, distribution capabilities, and AI investments for earnings growth [3]. Group 2: Cost Management and Savings - Meta's plan to significantly reduce Metaverse-related expenses, particularly within the Reality Labs segment, is expected to achieve cost reductions of approximately 30% by 2026, translating to potential savings of $5 billion to $6 billion [2]. - These cost reductions are seen as a way to offset increased spending on AI infrastructure, which is a critical investment area for Meta [2].

Core Viewpoint - Meta Platforms is shifting its focus from the underperforming Metaverse to AI initiatives, which is seen as a positive move by analysts, potentially leading to a significant increase in share price if executed well [1][4][12]. Financial Performance and Projections - Meta's shares could trade closer to $900 per share this year if the company maintains cost discipline and AI continues to enhance business results, with a bullish case suggesting a rise to $1,000 per share by 2026 [1][3][12]. - Currently, Meta is trading between 20X and 30X forward earnings, and a re-rating closer to 30X could lead to higher share prices [3][9][11]. Strategic Shift - The recent acquisition of AI wearable company Limitless indicates a strategic pivot towards AI, reflecting a commitment to redirect resources from the Metaverse to more promising opportunities [1][4][13]. - Analysts have criticized Meta's previous heavy investments in the Metaverse, suggesting that the company has more potential in AI, which could drive better returns [5][10]. Market Reaction - Following the announcement of spending cuts on the Metaverse, Meta's stock experienced a positive reaction, indicating investor approval of the strategic shift [4][11]. - The market's perception of Meta has been affected by high operating costs, but the recent changes may help restore confidence [9][12].

Core Viewpoint - Meta Platforms' shares are experiencing a recovery after a decline of over 25% from peak levels, attributed to stabilization in the tech and AI sectors, along with the company's decision to reduce its metaverse budget by approximately 30% [1] Group 1 - Meta Platforms' shares are on the rise again after a significant drop [1] - The recovery is linked to a calming in the technology and AI markets [1] - The company plans to cut its metaverse budget by around 30% [1]

Investment & User Engagement - Over $70 billion (70,000,000,000 美元) was invested in building out Zuck's metaverse [1] - The metaverse has fewer than 900 daily active users [1] Project Outcome - The project failed to achieve its intended goals of curing cancer and lifting humanity out of poverty [1]