Meta, the parent company of social media giants Facebook, Instagram, and WhatsApp, experienced a surge in its stock price on Friday, adding hundreds of billions of dollars to its market value. The company’s latest quarterly profit more than tripled, thanks to a rebound in digital ads, and it also announced its first dividend and authorized an additional $50 billion in share buybacks. As a result, Meta’s stock rose more than 20 percent, pushing it further into record territory and regaining its trillion-dollar status.
The rise on Friday added approximately $200 billion to Meta’s market value, roughly equivalent to the entire market capitalization of major multinational companies like McDonald’s. Mark Zuckerberg, Meta’s chief executive, described 2023 as a “year of efficiency,” during which the company cut costs by shedding tens of thousands of workers. Analysts at Truist Securities praised the cost-cutting measures, stating that they were “bearing fruit” in the form of higher profit margins. Meanwhile, analysts at Wells Fargo viewed Meta’s heavy investments in artificial intelligence as “playing offense,” and Goldman Sachs researchers noted that the company’s blockbuster results were enough “to put prior questions around platform strength behind us.”
The tech-heavy Nasdaq composite also rose by about 1.5 percent, reflecting Meta’s major sway over indexes like the S&P 500, which gained about 1 percent. The company’s performance also stood in stark contrast to that of its major rival Alphabet, Google’s parent company, whose earnings fell short of Wall Street’s expectations.
In the midst of Meta’s remarkable financial results, opinions on the topic varied among analysts. Some expressed confidence in the company’s cost-cutting measures and high profit margins. However, others remained cautious, questioning whether Meta could sustain its momentum in the long run. Despite the differing opinions, Meta’s strong performance in the latest quarter has undoubtedly left a significant impact on the market and the technology sector.