Meta's AI Investments Lead to Record Revenue and Losses

Meta Platforms Inc. reported a substantial $4.4 billion loss for its Reality Labs division in Q3 2024, despite a 29% increase in revenue from hardware sales. The company projects capital expenditures between $38 billion and $40 billion for 2024, with expectations of further increases in 2025, and anticipates higher operating losses for Reality Labs next year. CEO Mark Zuckerberg highlighted the strategic importance of investments in AI and virtual reality for business growth. Despite investor concerns about immediate returns on high expenditures, analysts like Gene Munster point to Meta's 19% revenue growth in the recent quarter as evidence of strong potential for future AI-driven monetization strategies. The competitive landscape for AI infrastructure remains intense among major tech firms, raising questions about short-term profitability versus long-term innovation.