[Asia Economy New York=Special Correspondent Joselgina] The stock price of Meta Platforms, the parent company of Facebook, is showing a surge of over 20%. Investor sentiment has revived due to the strong earnings report released the previous day and the announcement of a share buyback plan. Target price upgrades from Wall Street investment banks are also continuing.
On the 2nd (local time), in the New York stock market just before the afternoon close, Meta's stock price was trading around $187, up 22.6% from the previous session. At one point during the session, Meta's stock price surged 27%, marking the largest increase since 2013. The intraday high of $197.16 is more than double the 52-week low of $88.90 recorded on November 4 last year.
Accordingly, the market capitalization, which had once fallen to around $300 billion, is now fluctuating around $500 billion. The Wall Street Journal (WSJ) reported, "Market capitalization increased by $100 billion in a single day during the session," adding, "The surge followed better-than-expected earnings and the announcement of a share buyback plan."
After the market closed the previous day, Meta announced that its revenue for the fourth quarter of last year was $32.17 billion. Although this is a decrease compared to the same period last year, it significantly exceeded market expectations of $31.53 billion. Furthermore, the revenue forecast for the first quarter of this year also surpassed Wall Street's expectations. CEO Mark Zuckerberg stated, "This year is the year of efficiency," explaining that business expenses will be reduced more than previously forecasted. He also announced a $40 billion share buyback plan to boost the stock price this year.
Target price upgrades have followed on Wall Street as well. Ross Sandler, an analyst at Barclays, raised Meta's target price from $165 to $260. Mark Mahani, an analyst at Evercore ISI, also increased the target price to $275, citing cost reductions and a larger-than-expected share buyback program as reasons. He evaluated, "Does Meta deserve a 20% increase? Yes." Barton Crockett of Rosenblatt also maintained a buy rating and set a target price of $220, saying, "I am confident in the attractive valuation." Michael Morris, an analyst at Guggenheim, raised the target price from $130 to $210, stating, "Meta's investment approach will bring more sustainable cash flow growth than previous plans."
Meta's rally is also lifting the stock prices of major big tech companies. As of the afternoon, Amazon is up 6.27%, and Google Alphabet is up 6.84%. Apple is up 3.07%, Tesla 3.26%, and Microsoft (MS) 3.65%. Earnings reports for Apple, Amazon, and Alphabet will be released after the market closes today.
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