Meta Platforms, the world’s largest social media platform, said on Wednesday that it expected expenses this year to be higher than forecast because of heavy spending on artificial intelligence products and the infrastructure to support them.

The California-based technology company, which was founded in 2004 and owns Facebook, WhatsApp, Instagram and Threads, a rival to Twitter/X, is predicting total expenses of between $96 billion and $99 billion, up from $94 billion to $99 billion. Capital expenditure will be in the range of $35 billion to $40 billion.

Investors were spooked by the markedly higher cost of new services and a forecast that second-quarter revenue could come in below expectations, and pushed the shares sharply down.

Meta stock was 16.10 per cent, or $79.45, lower at $414.74 in late trading on Wall Street, valuing the company at $1.2 trillion. That was still more than 40 per cent higher since the start of January and 138 per cent up over the past 12 months.

Meta posted first-quarter revenue of $36.5 billion in the three months to the end of March, roughly in line with expectations of $36.2 billion, while “daily active people”, a key metric it uses to track unique users of any one of its apps, rose by 7 per cent. Net income was 117 per cent higher at $12.4 billion compared with $5.7 billion a year ago.

The technology giant disclosed only the daily active people figure for user growth, a first for the company. It said earlier this year that it would no longer give separate numbers for Facebook, which has seen growth slow.

“Meta’s earnings should serve as a stark warning for companies reporting this earnings season,” Thomas Monteiro, senior analyst at Investing.com, the financial news website, said.

“Even though the company did beat estimates in all top- and bottom-line metrics, it didn’t matter as much as the reported lowering revenue expectations for the second quarter. This is the exact opposite of what Tesla did on Tuesday and goes to show that investors are currently looking at the near future with heavy mistrust.”

Analysts at Jefferies, the US investment bank, have maintained a “buy” rating on the stock and said Meta “will continue to innovate on the advertising front, driving higher monetisation across its various platforms”, adding that new AI products “could drive improved performance for advertisers”.

Mark Zuckerberg, 39, the co-founder and chief executive, is worth $173 billion, according to Fortune magazine. He changed Facebook’s name to Meta in 2021 to shift the company’s focus to the metaverse, in which he has invested billions of dollars.