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(Reuters) – Meta Platforms disappointed investors on Wednesday with forecasts of higher expenses and lighter-than-expected revenue, knocking nearly USD $200 billion off its stock market value and raising fears the surging cost of Artificial Intelligence (AI) is outpacing its benefits.

Shares of the Facebook and Instagram parent dropped about 15% in extended trade following the report, its market capitalisation plunging to about USD $1 trillion.

The late-day slump in Meta’s stock value was just short of the USD $232 billion one-day loss suffered on February 3, 2022, which was the record one-day loss of market capitalisation for any U.S. company.

Alphabet shares fell 3% in extended trade and Microsoft declined 2%, with concerns that Wall Street may have underestimated the cost of the AI race hitting those Big Tech companies ahead of their reports on Thursday.

Meta said it expects April-June revenue in the range of USD $36.5 billion–USD $39 billion, with a midpoint of $37.8 billion, compared with analysts’ estimates of USD $38.3 billion, according to LSEG data.

The company raised its forecast for expenses this year to support investments in new AI products and the computing infrastructure needed to support them, adding that it expected spending would continue to increase next year.

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