Meta projected on Wednesday that revenue for the current quarter would be lower than what Wall Street anticipated and said it would spend billions of dollars more on its artificial intelligence efforts, even as it reported robust revenue and profits for the first three months of the year.

Revenue for the company, which owns Facebook, Instagram, WhatsApp and Messenger, was $36.5 billion in the first quarter, up 27 percent from $28.6 billion a year earlier and slightly above Wall Street estimates of $36.1 billion, according to data compiled by FactSet. Profit was $12.4 billion, more than double the $5.7 billion a year earlier.

But Metas work on A.I., which requires substantial computing power, comes with a lofty price tag. The Silicon Valley company said it planned to raise its spending forecast for the year to $35 billion to $40 billion, up from a previous estimate of $30 billion to $37 billion. The move was driven by heavy investments in A.I. infrastructure, including data centers; chip designs; and research and development.

Meta also predicted that revenue for the current quarter would be $36.5 billion to $39 billion, lower than analysts expectations.

The combination of higher spending and lighter-than-expected revenue spooked investors, who sent Metas shares down more than 16 percent on Wednesday afternoon after they ended regular trading at $493.50.

Metas earnings should serve as a stark warning for companies reporting this earnings season, said Thomas Monteiro, a senior analyst at Investing.com. While the companys results were robust, it didnt matter as much as the reported lowering revenue expectations for the current quarter, he said, adding, Investors are currently looking at the near future with heavy mistrust.

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Meta Says It Plans to Spend Billions More on A.I. - The New York Times