From Nasdaq: 2024-05-18 04:23:00

Meta Platforms (NASDAQ: META) is heavily investing in artificial intelligence with the launch of its Llama 3 large language model and Meta AI chatbot. CEO Mark Zuckerberg aims to make Meta the leading AI company globally, increasing the company’s budget for AI-related expenses, including data centers.

Meta raised its full-year capital expenditure outlook to $35 billion to $40 billion, up from $30 billion to $37 billion after spending $6.72 billion in Q1. Investors initially reacted negatively to the increased spending, but Meta’s strong cash generation and free cash flow of $12.53 billion in Q1 allowed for $14.64 billion in share buybacks.

Despite the substantial investment in AI, Meta has around $58 billion in cash and plans to continue aggressive share buybacks. With a forward P/E ratio of 23.5 and expectations for strong earnings growth, investors may find Meta’s stock buybacks at current levels or higher attractive.

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Randi Zuckerberg, former Facebook director and sister to Mark Zuckerberg, sits on The Motley Fool’s board. Author Adam Levy holds positions in Meta Platforms. The Motley Fool discloses its positions in Meta Platforms and has a strict disclosure policy.



Read more at Nasdaq: Meta Platforms Spent $6.7 Billion on Artificial Intelligence (AI) Data Centers Last Quarter, but It Spent Twice as Much on This 1 Thing