Meta's huge expenditure is reminiscent of the metaverse Waterloo that once devastated the stock price.

Meta Platforms Inc. has spent a huge amount to support its artificial intelligence ambitions, a move that has led some investors to recall the massive metaverse spending that severely impacted the stock price a few years ago. The financial report released by this Facebook parent company last week showed that its key indicators all exceeded expectations. However, Wall Street's focus is on capital spending, as the company stated that capital spending will reach as high as $72 billion this year and will "significantly increase" by 2026. During the earnings call, CEO Mark Zuckerberg downplayed concerns from the outside world about Meta potentially overspending on projects such as the Super Intelligence Lab, stating that "proactively building capabilities is the right strategy." We are now seeing Meta's stock price experiencing its worst four-day decline since November 2022, with a cumulative drop of nearly 17% and a market value loss of $307 billion. It is worth noting that the selling in 2022 was also driven by investor doubts about its spending plans, ultimately causing the stock price to plummet by 77% from its peak in 2021. "This makes it feel like Meta is repeating the same mistakes, once again investing heavily in frivolous projects or areas that lack a reasonable return on investment," said Tiffany Wade, senior portfolio manager at Columbia Threadneedle Investments. "Investors are losing patience."