Meta shares tumbled over 15% in late Wednesday trading following the company's warning of lower-than-expected third-quarter revenue and earnings.
This forecast indicated a notable slowdown for Meta, which has consistently surpassed investor expectations in the past year.
Despite the challenges, Meta stands out among social media companies by fully recovering from the ad slowdown caused by the pandemic in 2022.
The company's stock surged after its last earnings report in February, buoyed by the announcement of its inaugural quarterly dividend of $0.50 per share.
Meta's strategic investments in short-form video and AI ad products have shielded its business from the lasting effects of Apple's privacy changes.
Beyond the disappointing forecast, Meta delivered a positive earnings report, surpassing expectations in both revenue and user growth.
Daily active users across Meta's platforms increased by 7% year-over-year to reach an average of 3.24 billion in the last quarter.
While advertising remains Meta's primary revenue source, CEO Mark Zuckerberg emphasized the company's commitment to investing in new ventures like AI and mixed reality.
Zuckerberg highlighted that, despite significant investments, revenue from Meta's AI products won't have a substantial impact for some time.
Meta anticipates continued significant year-over-year operating losses from its Reality Labs division as it focuses on product development.