In an eventful earnings call on Wednesday, Meta CEO Mark Zuckerberg focused on the company's future prospects in artificial intelligence (AI) and the metaverse, highlighting investments in hardware, software, and ambitious growth plans. However, investors reacted negatively, causing a significant drop in Meta shares.

Despite reporting better-than-expected profit and revenue for the first quarter, Meta's shares plummeted by as much as 19% in extended trading, resulting in a market cap loss of over $200 billion. The downward trend continued on Thursday as shares opened more than 14% lower.

During the call, Zuckerberg acknowledged the volatility in Meta's stock during the phase of scaling new products without immediate monetization. He drew comparisons to previous endeavors, such as the introduction of short-video service Reels and Stories, as well as the transition to mobile. These investments ultimately proved successful but faced initial challenges.

Zuckerberg emphasized the potential monetization opportunities within Meta's existing ad-based revenue model, envisioning ads or paid content within AI interactions and business messaging. He discussed Meta Llama 3, the company's latest large language model, and Meta AI, their own version of OpenAI's ChatGPT.

Expanding into the mixed reality headset market, Zuckerberg highlighted the launch of Meta's operating system for Quest headsets, which he predicted would accelerate the growth of the mixed reality ecosystem. He also praised Meta's AR glasses, emphasizing their potential as an ideal device for an AI assistant.

However, Meta's Reality Labs, responsible for the development of the metaverse and related hardware and software, continued to experience significant losses. The division reported $440 million in sales for the first quarter but incurred losses amounting to $3.85 billion. Cumulative losses since the end of 2020 have surpassed $45 billion, underscoring the challenges faced by Meta in this emerging field.

Despite the recent stock decline, Meta's leadership remains optimistic about the company's future. Zuckerberg affirmed Meta's commitment to operating efficiently while increasing investments in AI. Meta now forecasts capital expenditures of $35 billion to $40 billion in 2024, reflecting their focus on infrastructure to support AI initiatives.

Zuckerberg cautioned investors that Meta's AI products would require a multiyear investment cycle to achieve profitability. He maintained confidence in their track record, citing past successful endeavors. Meta's CFO, Susan Li, echoed these sentiments, emphasizing the need to develop advanced models and scale products before generating meaningful revenue.

Investors had already begun trimming their holdings ahead of the call, partly in response to Meta's light revenue forecast for the second quarter. Nonetheless, Zuckerberg urged those willing to remain invested to expect long-term rewards, underscoring Meta's previous successes in building scaled experiences.

As Meta navigates the challenges of monetizing its investments in AI and the metaverse, the company's shares face increased volatility. With a renewed focus on efficiency and growth, Mark Zuckerberg and the Meta team are poised to shape the future landscape of technology and virtual experiences.