Meta stock jumps 20% after earnings in biggest market-cap jump in stock market history

Meta Platforms (META) stock rocketed higher on Friday, climbing more than 20% after the company posted better-than-expected earnings and guidance and announced new shareholder return initiatives.

With Friday’s rally, the company added nearly $200 billion to its market cap, a stock market record, according to Bloomberg data. Meta shares were trading around $475 on Friday; at its lows in 2022, the stock fell to as low as $90.

Meta’s market cap now stands north of $1.2 trillion.

For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion. Analysts were anticipating adjusted EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenue of $32.2 billion in the same quarter last year.

The company also boosted its stock buyback authorization by $50 billion and initiated a quarterly dividend of $0.50 per share. In the current quarter, Meta said it anticipates revenue of between $34.6 billion-$37 billion, surpassing analysts’ expectations for revenues to tally $33.6 billion.

Meta’s advertising revenue came in at $38.7 billion in the fourth quarter, beating expectations for $37.8 billion. The company also reported 2.11 billion Facebook daily active users. Wall Street was anticipating 2.07 billion.

The company reported ad impressions rose 21% over last year during the period while the average price per ad fell 2%.

Meta’s Reality Labs, however, continues to be a burden on the company. The division, which is tasked with turning Zuckerberg’s vision of the metaverse into a reality, lost another $4.65 billion, up from the $4.3 billion the company lost on the endeavor in the same period last year. Still, the division beat expectations on revenue, topping $1.07 billion versus an anticipated $812 million.

The launch of Apple’s rival Vision Pro headset could create a jump in consumer interest in AR/VR headsets and generate a knock-on effect for Meta’s Quest line of headsets.

But Meta’s Reality Labs efforts have taken a backseat in the minds of investors amid increased investments in generative AI. In January, Zuckerberg announced in an Instagram Reels post that the company’s long-term strategy was to develop general artificial intelligence and make it open source.

There’s no single definition of generative AI, but broadly speaking, it’s a kind of AI that can think and learn like a human. In other words, it’s capable of understanding a multitude of concepts rather than specializing in a certain field.

Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)

Meta founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images)

In 2024, Meta expects its expenses to total $94 billion-$99 billion, with the company noting, among other things, that payroll costs will rise this year as it adds more staff in higher-cost, technical roles amid its push into AI features.

Meta also disclosed that in 2023 restructuring charges, including severance and facilities consolidation, totaled $3.45 billion. The company’s headcount as of Dec. 31, 2023, stood at 67,317, down 22% over the prior year.

Meta has been on a hot streak over the last 12 months, with shares rocketing 121% over that period and outperforming the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

In January, the company’s market capitalization once again eclipsed the $1 trillion mark.

Subscribe to the Yahoo Finance Tech newsletter.Subscribe to the Yahoo Finance Tech newsletter.

Subscribe to the Yahoo Finance Tech newsletter. (Yahoo Finance)

Daniel Howley is the tech editor at Yahoo Finance. He’s been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.

For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here

Read the latest financial and business news from Yahoo Finance

Source link

Leave a Comment