Meta Platforms' (META) experienced a significant surge in its stock price on Friday, soaring by over 20% following the release of exceptional earnings and optimistic guidance, coupled with the introduction of new shareholder return initiatives.
This rally resulted in the company's market capitalization skyrocketing by nearly $200 billion, marking a historical achievement in the stock market, as reported by Bloomberg data. During Friday's trading session, Meta shares were valued at approximately $475, a stark comparison to its low point in 2022 when it plummeted to $90.
Meta's market capitalization now exceeds an impressive $1.2 trillion.
In the fourth quarter, Meta delivered adjusted earnings per share (EPS) of $5.33 on revenue amounting to $40.11 billion.
This surpassed analysts' expectations, with Bloomberg consensus data indicating anticipated adjusted EPS of $4.94 on revenue of $39.01 billion.
Comparatively, the company reported revenue of $32.2 billion in the same quarter of the previous year.
Furthermore, Meta announced an increase in its stock buyback authorization by $50 billion and unveiled a quarterly dividend of $0.50 per share.
For the ongoing quarter, Meta anticipates revenue ranging between $34.6 billion and $37 billion, exceeding analysts' projections of $33.6 billion in revenue.
In terms of advertising revenue, Meta outperformed expectations by generating $38.7 billion in the fourth quarter, surpassing the anticipated $37.8 billion.
Additionally, the company reported 2.11 billion Facebook daily active users, surpassing Wall Street's expectation of 2.07 billion. Despite a 21% increase in ad impressions compared to the previous year, the average price per ad experienced a marginal decline of 2%.
However, Meta's Reality Labs division continues to pose challenges, with a reported loss of $4.65 billion, an increase from $4.3 billion incurred during the same period last year. Nevertheless, the division exceeded revenue expectations, reaching $1.07 billion compared to the anticipated $812 million.
The forthcoming launch of Apple's competing Vision Pro headset may stimulate consumer interest in AR/VR headsets, potentially benefiting Meta's Quest line of headsets.
Despite Meta's advancements in Reality Labs, investor focus has shifted towards increased investments in generative AI.
In January, Meta's CEO Mark Zuckerberg disclosed the company's long-term strategy to develop general artificial intelligence and make it open source, as announced in an Instagram Reels post. Generative AI, broadly defined as AI capable of human-like thinking and learning across various domains, has become a central focus.
Looking ahead to 2024, Meta anticipates total expenses ranging from $94 billion to $99 billion, citing an increase in payroll costs due to the recruitment of additional staff in high-tech roles amid its AI initiatives.
Additionally, Meta disclosed restructuring charges totaling $3.45 billion in 2023, covering severance and facilities consolidation. As of December 31, 2023, Meta's headcount stood at 67,317, reflecting a 22% decrease compared to the previous year.
Over the past 12 months, Meta has experienced remarkable growth, with its shares surging by 121%, outperforming major tech giants including Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN). In January,
Meta's market capitalization once again surpassed the $1 trillion mark, reinforcing its position as a significant player in the technology sector.
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