Meta Platforms Inc. (NASDAQ: META) shares declined approximately 4% on Friday, reversing gains from the previous session. The stock closed at $751.66, with after-hours trading settling at $747.82, a drop of 0.51%.
The decline caused the estimated net worth of Meta CEO Mark Zuckerberg to fall by nearly $9 billion, bringing his total fortune to $257.5 billion, according to Forbes data.
The drop followed a warning from Goldman Sachs regarding the financial outlook for artificial intelligence infrastructure spending. Goldman analysts warned that AI hyperscalers, including Meta, face a significant revenue hurdle. The firm estimated that hyperscalers would need to generate roughly $300 billion in annual AI services revenue just to break even on their capital spending. Additionally, the firm projected that users would need to spend approximately $1 trillion in annual AI application spending for hyperscalers to generate solid returns.
Despite the recent pullback, Meta shares had rallied approximately 36% during the month of September prior to Friday's decline. This rally was driven in part by investor enthusiasm surrounding the company's Muse AI assistant and recent product expansions.
Meta has recently expanded its AI strategy into wearables, introducing new Ray-Ban Meta glasses, celebrity collaborations, hearing-enhancement features, and a device called Muse Charm. Zuckerberg described the VR glasses unveiled by the company as a "private cinema, workstation and gaming console." JPMorgan analyst Doug Anmuth estimated the potential market for these products could reach the "tens of trillions" of dollars.
Analysts from various firms have offered differing perspectives on Meta's AI strategy. LightShed Partners co-founder Rich Greenfield cited Meta's massive user base and software ecosystem as reasons the company has "a true right to win in AI." Constellation Research Chairman Ray Wang identified Apple Inc. (NASDAQ: AAPL), OpenAI, and Anthropic as major competitors.
