ASX to open higher as Wall Street surges, Meta raises spending forecast to fund AI expansion, live updates

Meta has raised the lower end of its annual spending forecast and announced it would introduce new non-voting shares, in a move that would help fund its costly AI expansion.

Meta, the parent company of Facebook and Instagram, has been pouring money into chips and data centres to compete more aggressively with OpenAI and Anthropic, eroding its historically strong free cash flow.

The new shares may allow the company to finance acquisitions and attract top talent without diluting CEO Mark Zuckerberg’s voting control as the AI race continues in Silicon Valley.

Meta said it now expects capital expenditure to be between $US135 billion and $US145 billion this year, up from $US130 billion to $US145 billion expected previously.

The company also reported better-than-expected quarterly revenue of $US64.60 billion, ahead of Wall Street estimates of $US63.37 billion.  

The early popularity of its consumer-focused AI agent Muse and the release of a competitive new series of AI models have helped Meta justify those investments to investors, even though some enterprises are restricting the agent’s access over security concerns.

The announcement comes against a backdrop of legal challenges, including a $US25 billion penalty ordered by a judge in New Mexico after a jury found Meta misled the state’s residents about ​how it shared user data with third parties and enforced policies on hate speech and misinformation in a case related to British political consulting firm Cambridge Analytica.

In August, Meta agreed to pay as much as $US18 billion over a decade and restrict teenagers’ use of Facebook and Instagram to settle claims by nearly all US states alleging that Meta’s platforms were designed to addict children.

The agreement removed a significant regulatory hurdle that had weighed on Meta’s stock and allowed the company to avoid a potentially lengthy trial that could have exposed more internal do***ents about its treatment of young users.

Almost all of Meta’s revenue comes from advertising, with Reels competing with TikTok and YouTube Shorts for dominance in the short-video market and Threads taking on Elon Musk’s X, while its AI sharpens ad targeting and recommendations to boost user engagement.

Meta shares traded lower across Wednesday afternoon, closing at $US697.52 before beginning to rise again in after-hours trading.

– Reporting with Reuters