Meta share price rockets 24% – here is why

Meta Logo

Instagram and Facebook parent company Meta’ shares surged 23.3 per cent on Thursday. The surge came on the back of the company’s stricter cost controls this year and a $40 billion share buyback, as CEO Mark Zuckerberg called 2023 the ‘year of efficiency’.

The counter closed at $188.77 on Nasdaq up by 23.28 per cent. Meta revealed that the company is focused on improving its content recommendations powered by artificial intelligence and its ad targeting systems to keep users clicking which has fallen on hard times amid a broad post-pandemic decline in digital ads.

The company will cut costs in 2023 by $5 billion to a range of $89 billion to $95 billion, a steep drop from the $94 billion to $100 billion it previously forecast, and it projected first-quarter sales that could beat Wall Street estimates, a Reuter report said.

Zuckerberg in the official statement described the focus on efficiency as part of the natural evolution of the company and called it a “phase change” for an organization that once lived by motto “move fast and break things.”

He said, “We just grew so quickly for like the first 18 years,” Zuckerberg said in a conference call. “It’s very hard to really crank on efficiency while you’re growing that quickly. I just think we’re in a different environment now.”

The cost reductions reflect Meta’s latest plans to reduce data center construction costs this year as part of moving to a structure that can support both AI and non-AI work, the statement said.

The digital advertising giant faced a brutal 2022 as companies slashed marketing spending due to economic concerns, with competitors like TikTok attracting younger users and Apple Inc. (AAPL.O) ‘s privacy update continued to challenge the targeted ad placement business.

In response, Meta cut more than 11,000 of his staff in November. This portends tens of thousands of layoffs in the tech industry that will follow.

“Our management theme for 2023 is the Year of Efficiency, and we are focused on becoming a stronger and more agile organization,” Zuckerberg said in a statement.

The monetization efficiency of Facebook’s Reels, a short-form video format, has doubled in the last six months, with the company on track to reach near break-even by late 2023 or early 2024, with profitable growth thereafter. It’s on track, he said on a conference call. The American multinational technology conglomerate has a market capitalization of TCR49.50. Year-to-date, the stock has rebounded 51%. The stock is trading from a 52-week high of Rs 248 to a 52-week low of Rs 88.09.

Related Posts

Legacy and Innovation of Eddie Bauer: A Closer Look at a Timeless Outdoor Brand

In the realm of outdoor gear and clothing, few names resonate as strongly as Eddie Bauer. Established in 1920, the Eddie Bauer brand has a rich history of crafting high-quality…

Is Airalo the Ultimate Choice for International Travel? A Comprehensive Review

International travel has evolved significantly in recent years. The need for seamless connectivity while abroad is paramount. Airalo, a global eSIM marketplace, has garnered attention as an attractive…

WP Engine Hosting: Is It Worth the Investment? A Critical Review

In the ever-expanding world of web hosting services, WP Engine has emerged as a prominent player, specializing in managed WordPress hosting. WordPress is the most popular content management…

From Handmade to Vintage: A Critical Look at Etsy’s Product Range

Etsy, founded in 2005, has grown to become one of the world’s largest online marketplaces for handmade, vintage, and unique items. What began as a platform for artisans…

Paramount+ Review: Is the Streaming Service Worth Your Subscription?

In the ever-expanding landscape of streaming services, Paramount+ has emerged as a prominent player, offering a vast library of content from the ViacomCBS portfolio. With a wealth of…

MyProtein: A Comprehensive Review of Their Products and Services

MyProtein is a British sports nutrition company that was founded in 2004. It is now one of the largest sports nutrition companies in the world, with customers in…

Leave a Reply

Your email address will not be published. Required fields are marked *