Wall Street delivered a split verdict Thursday on Big Tech's AI ambitions. Meta shares plunged nearly 10% at the opening bell, while Google-parent Alphabet surged more than 6%.
The sharp divergence came after both tech giants reported quarterly earnings Wednesday, revealing starkly different investor sentiment toward their massive artificial intelligence investments.
Alphabet posted a profit of $62.6 billion on revenue of $110 billion, easily beating expectations. Investors cheered the company's success in integrating AI across its major divisions and its strong revenue performance.
Meta, by contrast, spooked the market by announcing expenses climbed to $33.4 billion as it pursues "superintelligence" - including a hiring spree for top AI talent. The company also raised its projected capital spending by $10 billion, to a range of $125 billion to $145 billion, primarily for data centers.
Unlike its rivals, Meta's AI investments lack a direct revenue stream. Amazon and Microsoft, which also reported Wednesday, saw shares fall 2% and 3.7% respectively on AI concerns.
To fund its AI ambitions, Meta announced last week it would cut roughly 8,000 jobs and leave 6,000 open roles unfilled.
Early Thursday, the Dow Jones Industrial Average gained 0.8% to 49,241, while the S&P 500 rose 0.2% to 7,151. The Nasdaq Composite was flat at 24,665.