Unimpressed. Is this a sign that the ev maker can get back on track, or will a different reality set in for the stock . Im Courtney Reagan in this evening for melissa lee, coming to you live from studio b at the nasdaq on the desk tonight tim seymour, Karen Finerman, dan nathan, and guy adami. And we start off with meta shares plunging 11 after the company gave weak revenue guidance for the year. It also said capex would be higher than expected thatowing a beat on the top and bottom line it could be the worst drop since october 2022 Julia Boorstin is here to dig into the details what else stands out to you . Well, courtney, the better than expected results were very much outweighed by that lighter than expected Second Quarter revenue guidance, as well as higher than expected expense guidance the higher capex guidance reflects larger than planned investments in a. I. , including gpus, as well as in data center. She also told me that the companys higher total expense range is partially due to legal expenses, and she noted that metas investments in a. I. Do continue to pay off, and were reflected in the Revenue Growth that we saw, stronger than expected Revenue Growth that we saw in the First Quarter as for the companys lighter than expected Second Quarter revenue guidance, lee telling me, quote, what our outlook is reflecting is with are really lapping a period of both stronger demand, in particular from chinabased advertisers now, the call is just starting now. Were starting to hear a lot more about the impact of a. I. And some questions about the cost of those a. I. Investments courtney thats really interesting context. Julia, thank you i mean, guy, what do you make of those results . I think thats an interesting point from julia a larger investment than planned in a. I. A good thing quarter was very good well run through it real quick. Revenue up 27 year over year. Margins up 13 basis points year over year. I mean, eps was a significant beat you know, capex came in pretty much in line theres a lot to like here its the guidance. And if you think about, 8 billion people on the planet, 3. 2 billion use facebook every single day i mean, clearly the cat bird seat heres the problem the guide, number one, and the technicals, number two an open below 450 tomorrow and theres going to be technical damage its not a question of, where do i sell the stock, its a question of, how much pain do i have to endure before i add to my long position or get in altogether and thats going to be the rub tomorrow, given the levels theyre trading at right now dan, what is your reaction . Yeah, i think its a matter of expectations. Coming into the quarter, expectations were up 114 or Something Like that. So, they kind of hit that. The stock was up 40 into that sales expectations were up, you know, 35 , 40 or something. This is quarter, year over year, so, the comps were the problem here the whisper number got a little bit ahead. And its a theme were seeing. We can take, you know, tesla and its performance out of it. It wasnt a good quarter, it wasnt a good guide. It was just a lot of qualitative comments about their business Going Forward that caused a short squeeze. Here, investors are kind of pricing, as this as good as it gets, especially in the market environment that were in. And i think valuation is coming back into the conversation, as it relates to megacap tech its had such a run, when you look at shares of meta does 11 feel overdone or does it feel like this is the time to take some profit this is a massive move. Weve seen the company have a couple nasty quarters in the past and not so distant past, be you this kind of a move is probably patiented given the kind of move its had. Its outperformed the s p not by a little bit its up 35 year to date versus the s ps 5 it was up 193 last year versus the s ps 24 . So, the outsized performance of this company is a function of a lot of things. Its including the year of efficiency, it sounds like its not going to be the year of efficiency Going Forward so, we can put some of that dynamic in the background. I think the risk reward into the print, obviously, now its easy to see this, it wasnt that great. I think the risk reward for this company in the medium to longterm is fantastic i think the growth even for 24, if you look at consensus, street is saying 17 . Guy pointed out however much thv grown year over year i think thats conservative. So, i think theyre going to have a way to work themselves back dan brings up the technicals, i mean, theres some elements of this chart, or guy mentioned the technicals, you got to theres a big backfill that you could stay on this company and, again, this is one of the very, very, i would say, seemingly bulletproof names in megacap tech because of this multiple. And i think this will be a pause on some level for people to look at a nasdaq thats struggled, its had a good couple days, but really, you look at the qqqs, and we brought this up, if it was last friday afternoon when we were closing on the lows, we were pointing out the qs had done nothing in terms of relative outperformance, going all the way back to july of last year youre making this argument. Theres a struggle in some of the biggest market cap stocks in the world, even though this one is the one that probably people feel most comfortable with karen, they may feel most comfortable, its pulling down sentiment. Snap, pinterest, down sharply after the bell does that feel right im not sure snap, im not really sure, but just to meta, i think this is my biggest position, so, this is clearly a up bummer but as dan, guy said, the quarter itself was fine. Its the outlook thats disappointing. I do always want to hear the call, though theres some nuance on the call that sometimes, fairly short press release doesnt really get you. I think you said at the top, is the spend, the additional spend on a. I. , they have shown, i think the spend on a. I. Has been worth it i dont know if theyre giving conservative numbers for that spend. I also dont know if they are giving conservative numbers for that revenue id be interested to hear the cadence of the quarter, how revenue was, and i dont know if theyll give april color or not, that would be interesting to me. With this move, if it were to open here down this much tomorrow, it would now be a below market multiple stock, which, to me, doesnt seem like the right price. Now, does that mean, you know, im often a proponent of the threeday rule on a very big move, wait for three days, but this is a very big move that i think i think seems overdone, but i want to hear, maybe theres something im missing. Quick question. You just said below market multiple were going to be mid 2024, so, were going to start looking at 2025 estimates, im looking at consensus for 15 Earnings Growth next year, flat margins its trading at 21 times next years expected, with the stock down here, you can see is it that cheap i guess enormous amount of cash, as well and and theyre buying a lot of stock back and theyre kind of massaging those earnings a little bit so, the street consensus right now is calling for mid teens Earnings Growth. It might get to a point, if we do see some sort of revenue slowdown, right, that maybe these stocks dont look that cheap. Thats been the narrative right now, that the growth is really kind of hyper, right and so, i dont know, thats the conversation that people are going to have, and if were in a higher for longer, you know, rate environment, i just think that some of these the multiples that weve gotten really used to are going to come under fire and just wait until microsoft reports, because if microsoft gave this sort of guidance tomorrow when they report, that stock could be down 10 . That stock, theyre already looking at a multiple thats vastly different, right . So, i agree with you there i feel more comfortable there. I have a tiny microsoft bet. Not really even a bet. Meta is much, much bigger to me. But well see. I think get more data, but it does seem awfully overdone for something that wasnt super frothy going in. It wasnt, and i what i want to hear on the call is also some ability for the management to express that they can be very flexibility on their cost structure. I think theres a lot of flexibility in terms of what they can do in terms of their operating expenses and they can hold margins in line and this is what the company they came in off the ledge in terms of the meta verse. This year of efficiency has been kind of a joke we reference this with almost every company that now has been able to execute in a way that only really meta really was first out there. I want to hear from them, that we can be flexible so, i think thats very interesting. By the way, is this the m in the helm it is this is the only company that actually fit the description was this actually the m, you made your acronym im just louis im sorry its the l in my blicep trade. Okay boom. Boom. There you go. Well, for more on meta, lets bring in fast money friend gene munster of Deepwater Asset Management gene, what are your thoughts so far . I know the call is ongoing, and thats where were going to get more important nuance. Right on, courtney. And i think tim, your comment, about efficiency or leverage, operating leverage, is appropriate, given, i think, the piece that jumped out to me from zuckerbergs opening remarks, hes just getting going on them right now, but was a piece of bad news related to the amount of invest theyre going to have to make on capex and energy to build a. I. And he said, used the words, i want to specifically call this out for investors to know that there is going to be a greater investment period before we realize the full potential of a. I. This reminds me of things that amazon has done in the past. Just kind of reminding, there are going to be periods of more investment i read that as probably several quarters of this investment phase, they obviously just updated the capex guidance for the full year, but dont expect im reading between the lines here, much of a lift or maybe a breakout in terms of a. I. One more piece, courtney, is beyond that bad news, to say hes bullish about a. I. And the potential on meta is an understatement he rattled off five different opportunities that they have within a. I. , i want to highlight one of them. He talked about lam ma and building a big business at scale. I believe theyre going to build an awstype of business in the next several years once they get to scale investors do definitely seem to be picking up on this investment, because the stock now taking another leg lower here, gene, down about 19 i know, obviously, you know, theres a lot of place here with china, advertising from china. Have we heard anything about that yet on the call, what do you want to hear when it comes to that area of the business they havent mentioned it so far, i mean, my thoughts on that is that, i think some of the benefit that they they are seeing a benefit from a. I. , by the way, but its not a breakout benefit yet, but some of that benefit has been muted in the guidance for june, if not for the impact of temu pulling back, they probably would have guided slightly up, they guided down by about a percent and a half, so, i think that, you know, this is these hard comps from temu are going to continue kind of into the september or december quarter, and so, thats going to be another headwind. I think its easy to get the wrapped around the vortex of these headwinds, but ultimately, guy at the beginning of the comments, you led off with a 3. 2 billion users, thats the same thing that zuckerberg led off with, and i think that is appropriate to lead off with that up 7 year over year versus up 8 in december thats a really hard number to grow anything above 1 is a win they continue to grow that base. They said it was particularly strong in the u. S. , i think the stock is going to continue to move higher, because these a. I. Benefits, its a function of time before they start to see it gene, clearly Mark Zuckerberg is a fast money fan, so, i want to say hi to mark and the gang its interesting the quarter on its own, i think, was wonderful. Down 18 now and i didnt think this potentially could happen, but were looking at levels, you know, the prior alltime high in the stock was made, i think, in august of 2021, around 385. That should be huge support. So, i guess, my question to you is, as karen mentioned earlier, i mean, at some point, this is getting a little absurd in terms of the magnitude of the selloff. I thought, if you would have just given me the guidance and given me the commentary about, that zuckerberg talked about this investment phase and the acceleration thereafter, i would have guessed the stock would be down between 5 and 10 . And this is a standard deviation away from that, and i think it speaks to this understoolying fr in tech investors that the partys going to end the echoes of 2000, if they werent investing then, they know all about those Lessons Learned and people just dont want to be left in this if it ends up being Musical Chairs its not going to be that. A. I. Is real but this is a classic overreaction, just given, i think, a lot of underscores the uneasiness that investors have about this a. I. Opportunity. Great stuff, gene were going to let you go to get back on the call were going to check in with you later. Were going to go back to Julia Boorstin, who has been listening in while weve been talking to you, gene, what else can you share, julia yeah, ive been listening to Mark Zuckerberg talk about continuing to invest massively in a. I he talked about the rollout of this latest the latest a. I. Chat bot and how the results of all of their investments, they have lama3, it quote leads me to believe we should invest even more to build a. I. He says, we will continue focusing on operating the rest of our company efficiently, but even while shifting resources to focus on a. I. , they will we will grow our investment meaningfully before we make revenue from some of those products so, they talked a lot about how theyre already seeing a. I. Accelerate, the potential and the impact of some of their ad businesses, but what hes saying here, as they work on the large language models, as they roll out the chotat bot, theyre goi to double down on the a. I. Investments. They have drawn so much criticism about overinvesting, perhaps, in the metaverse space, but hes saying right now, a lot of those investments are actually a. I. Investments and theres a huge overlap he sees between the two businesses the stock is down over 16 on these comments, and on the increasing expenses for the company, but notably, zuckerberg seems to be trying to reassure the street that these are big up front investments, but they do pay off over the long run. Yeah, interesting stuff keep us posted alphabet, microsoft shares getting pulled down here seemingly by this meta report. Not nearly as much, of course, microsoft shares down 2 , alphabet down 3 amazon, as well, lower by 2 i mean, its it just kind of surprises me, tim, maybe this is not a trade, but its an investment you have to invest in the future, and a. I. Seems to be it. Im shocked the stock is down 17 on just that but this is a company that told us they were spending and investing in the metaverse and they were punished fair. I agree with you. And it is interesting, just to hear a ceo kind of scramble to i dont know if hes scrambling to the stock, i dont know if he cares on some level, he probably does, but you know, we know that over time, what hes saying is, hes saying what is obvious its going to take some time to invest in a. I. They they are also some of the they are one of the few companies thats actually seeing benefit here in the short run. But if you think about even just the technical elements of what markets will do on the back of this, i mean, meta alone, you know, if it closes down 20 , 15 now down, but you can do that math theres 75 bips on the nasdaq tomorrow and you see other companies, you know, acting in kind and i think people are trying to get ahead of some kind of a less than rosy from somebody else doing some math, this would be 200 billion in market cap, so, just think of that, okay like, and so, this is on a spend thats 2 billion higher than people expect on 2 billion revenue that are lower than they expect and what i think is important about this little exercise here is, like, this can happen to your most favorite stocks. It happened to meta when they changed their name to meta and said they were going to spend tens of billions of dollars. The stock sold off 77 okay so, like, i just think weve been living in this bizarro world in the last nine to ten months, since again a. I. Has infected the stock market, but a very narrow slice of the stock market that owns the stock market so, if we get microsoft and going that have similar messages, its not even the message is so bad, we believe that they should be investing like this, because this is going to be the feature. Meta will be a 2 trillion Market Cap Company at some point in the future. It might be a 3 or 4 trillion Market Cap Company, but it could get cut in half on the way there. And weve seen that in nvidia before, it was down 70 from its 21 high my point is, i guess, three months ago, no one could ever see this happening again, and im not saying its going to happen again, but weve had some recent history that suggests that it could. Quite a move, and were going to continue to follow it throughout the show and talk about ford, chipotle, so much more, and i think were going were going to go to break, guys its your show, court do you want to do that we can keep going we got to pay the bills you want to talk markets . Sure. Next block. Lets do that well do it next block all right. Coming up, we have a lot more action to bring you, ibm, chipotle, ford, all on the move. The details of those quarters are coming up. And tesla charging higher of the back of their results, talked about that a lot yesterday and what the ev maker is promising to do, if they can deliver, of course, a huge wild card and how commentary from the Earnings Call impacted some other names today. Very interesting moves you dont want to go anywhere. Much more fast money up in two. Youre watching fast money, here on cnbc well be right back. Business. Its not a ninetofive proposition. Its all day and into the night. 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