Meta Stock Is Unstoppable, Continues Surge as Zuckerberg Regains $100 Billion Wealth Status
Key takeaways
- Meta stock has soared 125% in 2023
- CEO Mark Zuckerberg is back in the $100 billion club after the stock climbed a further 3% yesterday
- AI, the “year of efficiency” and increased ad revenues have all bolstered the stock’s performance
Meta can do no wrong in the eyes of Wall Street: it’s finished up two mass layoffs rounds, delivered on AI and increased its advertising revenue last quarter despite the hurdles from last year. But is there still room to go with the stock, or has it peaked? Let’s get into the details.
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What’s happening with Meta stock?
Meta stock climbed a further 3% on Thursday to officially induct CEO Mark Zuckerberg back into the $100 billion net worth club. The share price move now puts Zuckerberg as the 11th richest person in the world, according to Forbes, and is the first time he’s hit the crucial wealth marker since February last year.
Meta stock has seen a blinding rally this year after the woes of 2022 blighted the entire tech market. From the trough in November 2022, Meta’s share price has risen from the ashes to hit a massive 125% increase in 2023. It’s currently trading for $281.
The stock saw a rare 2.8% dip last week thanks to Apple’s flagship developer event, where it unveiled the new Apple AR headset — a market that, so far, Meta has cornered. But it was only a blip, with the share price soon rallying again.
What’s driven this year’s rally?
There are several reasons why Meta, which owns Facebook, WhatsApp and Instagram, has performed so well, but one factor definitely has outweighed the others: cost-cutting.
When Zuckerberg first announced Meta’s ‘year of efficiency’ at the start of 2023, it lit a fuse under the share price and every mass layoffs announcement — the first the company’s ever had to do — has been met with rampant enthusiasm from Wall Street.
Another factor is Meta’s AI development, which it quickly jumped on as generative AI wowed the world with its capabilities. It promptly rolled out AI-powered user recommendations and AI marketing tools for advertisers, plus the potential for AI integration into the metaverse is tempting for investors.
It’s also handled declining ad revenues better than most other companies. Its Q1 earnings report revealed a 3% revenue increase, 4% revenue growth in its ‘Family of Apps’ segment and crucially, a 4.1% rise in ad revenue and 26% climb in ad impressions. It’s a remarkable recovery given Apple’s decision to give its iOS users power over which companies track them, which cost Meta billions of dollars last year.
The bottom line
Meta’s share price has skyrocketed as the company is doing all of the right things in Wall Street’s eyes to boost efficiency, cut costs and turn around its advertising revenue fortunes. Now that AI is on the scene, Meta still has bags of potential, so we’re likely to see the share price rally continue this year.
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