Shares of Meta Platforms Inc. were up about 20% premarket after the Facebook parent lowered its spending forecast and increased its share buyback plan by $40 billion.
In that vein, the company could see its market cap rise by about $75 billion and the stock record its biggest one-day rise in a decade.
The movement in Meta’s shares was contagious to the shares of Amazon.com, Apple and Alphabet, all with market values of more than US$ 1 trillion, which publish balance sheets after the market closes.
Meta’s earnings prompted at least 19 analysts to raise their price targets for the company’s shares, with several saying a combination of lower costs, an optimistic forecast for revenue growth and share buybacks will boost earnings per share.
The result also provided some relief to the market after Snap’s earnings slump reported on Tuesday, which sent technology stocks lower.
“After the Snap debacle, the fact that Meta wasn’t so bad gave tech mega-caps a boost,” said Fiona Cincotta, an analyst at City Index.
“There is also a less aggressive Fed, which is also driving demand for growth and technology stocks in general.”
Meta now expects its 2023 spending to be between $89 billion and $95 billion, down from a previous forecast of $94 billion to $100 billion, with the company’s Chief Executive Mark Zuckerberg calling the period “Year of Efficiency”.
There were also signs that Meta’s core social media business was getting back on track, with monetization efficiency for Reels on Facebook doubling and the business heading towards break-even by the end of 2023 .
The company, which forecast first-quarter revenue above market estimates, also said Facebook’s daily active user base grew to 2 billion from 1.98 billion in the previous quarter.
“The Meta is regaining its charm,” said analysts at Baird.
Source: CNN Brasil
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