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Meta’s Stock Surges After Jump in Profits

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Meta’s Stock Surges After Jump in Profits

Meta’s stock price soared on Friday, adding hundreds of billions of dollars to the market value of the social media giant that owns Facebook, Instagram and WhatsApp.

The company said on Thursday, after the market closed, that its latest quarterly profit more than tripled, as it benefited from a rebound in digital ads. It also announced its first dividend and authorized an additional $50 billion in share buybacks.

Meta’s stock rose more than 20 percent in early trading on Friday, pushing it further into record territory. The company recently regained its trillion-dollar status, and because of its size it holds major sway over indexes like the S&P 500, which gained about 1 percent. The tech-heavy Nasdaq composite rose even more, by about 1.5 percent.

The rise on Friday added some $200 billion to Meta’s market value, roughly as much as the entire market capitalization of major multinational companies — like McDonald’s.

Mark Zuckerberg, Meta’s chief executive, called 2023 a “year of efficiency,” in which the company cut costs, in part by shedding tens of thousands of workers.

“What’s not to like?” analysts at Truist Securities wrote in a research report. They said the cost-cutting measures were “bearing fruit” in the form of higher profit margins.

Analysts at Wells Fargo said they viewed Meta’s heavy investments in artificial intelligence as “playing offense.” They said Meta’s earnings were a “stark contrast” to those from its major rival Alphabet, Google’s parent company, which reported earnings that fell short of Wall Street’s expectations.

Goldman Sachs researchers said that it was unclear whether Meta could keep up its momentum, but the company’s blockbuster results were enough “to put prior questions around platform strength behind us.”

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