Meta’s Massive AI Spending Sparks Investor Concerns Despite Strong Earnings

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Getty / Futurism

Meta CEO Mark Zuckerberg is doubling down on artificial intelligence, with the company set to spend an astounding $70 billion to $72 billion on AI development this year. The updated figure, revealed during Meta’s recent earnings call, exceeds its previous projection of $66 billion to $72 billion and highlights Zuckerberg’s aggressive push to position Meta at the forefront of the AI revolution.

However, this ambitious spending spree has rattled investors. Meta’s stock plunged over 11 percent on Thursday, even as the company reported higher-than-expected revenues. The sharp decline reflects growing anxiety among shareholders over Meta’s ability to convert its colossal AI investments into tangible returns.

Industry analysts are voicing similar concerns. “The total dollar spend is just kind of what hangs us up a little bit,” said Brian Mulberry, portfolio manager at Zacks Investment Management. He noted that investors need to see clearer evidence of how Meta’s AI investments will eventually boost profitability.

The sentiment underscores a larger unease sweeping through the tech sector, as rivals like Alphabet and Microsoft also ramp up AI spending to unprecedented levels. The surge in capital commitments has sparked fears of an AI bubble that could have far-reaching economic consequences if it bursts.

Despite the skepticism, Zuckerberg remains undeterred. He insists that early signs of AI-driven growth justify the spending. “We’re seeing the returns in the core business,” he said. “That’s giving us confidence that we should be investing a lot more.”

Meta has been aggressively recruiting top AI talent and investing billions in startups, including a $14 billion stake in Scale AI. Yet recent job cuts within its AI division hint that challenges may already be emerging behind the scenes.

As the race to dominate AI intensifies, Meta’s high-risk, high-reward strategy may define not only its own future but also the trajectory of the entire tech industry.

Powell Warns Against Assuming Another Rate Cut in December

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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Image Source: Facebook/Twelve Cupcakes

US Federal Reserve Chair Jerome Powell has cautioned investors not to assume that the central bank will deliver another interest rate cut in December, following its second consecutive reduction announced on Wednesday.

The Federal Reserve lowered its benchmark interest rate by a quarter of a percentage point to a range of 3.75 to 4 percent and said it would restart limited purchases of Treasury securities. The decision was backed by a 10-2 vote within the Federal Open Market Committee.

In his post-meeting remarks, Powell said, “A further reduction in the policy rate at the December meeting is not a foregone conclusion, far from it.” His comments quickly shifted market sentiment, pushing Treasury yields and the US dollar higher, while stocks turned lower. Traders scaled back expectations for another cut, with the probability falling from over 90 percent to about 60 percent.

The Fed also announced plans to end the shrinking of its balance sheet starting December 1. Since 2022, the central bank has reduced its holdings by more than two trillion dollars, bringing the total below 6.6 trillion, its smallest size since 2020.

Powell noted that the ongoing government shutdown has limited access to key economic data, making it harder for officials to assess the economy’s direction. “If you are driving in the fog, you slow down,” he said, suggesting the Fed may proceed cautiously in the coming months.

While Powell maintained that inflation is moving toward the two percent target, he acknowledged that economic growth remains moderate and that risks to employment have increased.

Policymakers remain divided on future rate cuts. Some members have warned against easing too quickly, given that inflation is still running above target, while others stress the need to support a cooling labor market.

Worcester Academy Extends State-of-the-Art Capozzoli Athletic Center

Wanjiru Waweru, Jadetimes Contributor

W. Waweru is a Jadetimes News Reporter Covering America & Sports News

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Image Source: Spectrum News

Worcester, Massachusetts - Worcester Academy revealed a fresh "the state of the art" Capozzoli Athletic Center at New Balance Performance Park. It is a 72,000 square foot facility with many basketball courts, a new weight room and pool, recent locker rooms and training room, as well as meeting rooms. It provides something for everybody. "I think we were fortunate enough to have a few folks who came here years ago, as PG students, and Worcester Academy changed the trajectory of their lives," said Head of School, Kevin Breen, "they wanted to give back and they gave back in a big way so we wanted to make sure that this facility would honor their name and their legacy. I remember particularly talking to Rick Carlisle, he said that when he came back here in the 70s, we had coaches, but we didn't have facilities, and he said if you ever could get to the place where you had legendary coaches like Tom Blackburn like Dee Row like the coaches we have today, but you match that with state of the art facilities we would have the opportunity to be premier Prep school for atheltics."

Wanjiru Waweru is a Jadetimes News Reporter covering America & Sports News for the City of Worcester.

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