Meta Platforms Inc: The Hottest Tech Stock in the Market Right Now

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Meta Platforms Inc: The Hottest Tech Stock in the Market Right Now

How Meta Platforms Inc. Became the Hottest Tech Stock in the Market

Meta Platforms Inc, formerly known as Facebook, has made headlines in recent months as one of the hottest tech stocks in the market. Despite facing a

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Meta Platforms Inc, formerly known as Facebook, has made headlines in recent months as one of the hottest tech stocks in the market. Despite facing a tumultuous year of falling sales, layoffs, and changes in Apple Inc.’s privacy policy, Meta’s shares have surged 140% from a seven-year low in November. In this article, we will examine the reasons behind Meta’s impressive turnaround, its current performance in the market, and its future prospects.

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The Meta Turnaround

The catalyst for Meta’s recent rally is likely traced to both extensive cost-cutting measures and adjusting to the negative effects of Apple’s privacy changes which significantly hurt ad revenue. The company announced further layoffs last month and pledged to be more efficient, adding kindling to the rally. These cost-cutting measures have been bolder than at peers such as Alphabet Inc, making Meta the most durable megacap if consumer spending weakens.

Meta Current Performance in the Market

More than two dozen brokerages have increased their price targets on the stock since the second round of job cuts was announced. Analysts have pushed up Meta’s 2023 earnings per share estimate by 15% over the past three months. Morgan Stanley’s Brian Nowak in March restored his buy-equivalent rating after sitting on the sidelines for less than five months. The ad business has slowed, but it has stabilized, and changes in Apple Inc.’s privacy policy are no longer affecting Meta’s year-over-year growth rate.

While some investors may be unwilling to pay up now for Meta after the blistering rally since November, Meta’s shares are still much cheaper than its big tech peers and the Nasdaq 100 Index. Trading at 17 times forward earnings, Meta is below its historical 10-year average of 26 times. In contrast, Amazon.com Inc. trades at 36 times, Microsoft Corp.’s price-earnings ratio is 28, Apple is at 26, and the tech-heavy gauge sells for 24 times.

Future Prospects

The concern about inflation and a potential recession has squeezed ad budgets at businesses, crimping the primary revenue stream for companies like Meta, Google parent Alphabet, and Snap Inc. However, some analysts are seeing more stability in overall advertising demand. With trends stabilizing, Meta’s sales are set to rise by 4.7% this year, with growth more than doubling to about 11% in 2024.

While that’s a much slower cadence than investors are used to, Meta under Chief Executive Officer Mark Zuckerberg has managed to resume growing. In many respects, what Mark Zuckerberg has done in the last couple of months is: begin to look at running the company like a regular company as opposed to a tech company with top-line growth that can cover a lot of mistakes because they really didn’t have that anymore.

Conclusion

Meta Platforms Inc, formerly Facebook, has impressed Wall Street with its impressive turnaround in recent months. Cost-cutting measures, coupled with stabilizing advertising trends, make Meta’s stock look more durable in a looming economic slowdown. Despite facing a tumultuous year of falling sales, layoffs, and changes in Apple Inc.’s privacy policy, Meta’s shares have surged 140% from a seven-year low in November. As concerns about inflation and a potential recession loom, Meta’s cost reductions have been bolder than at peers such as Alphabet Inc., making it the most durable megacap if consumer spending weakens.

COMMENTS

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    Arthur 1 year ago

    Mark Zuckerberg needs to let the Metaverse go. His ideas for this are not the best and the company has already sunk in many billions in its pursuit. It’s clear that almost anyone is interested and what they’ve created is not a good product at all. If Meta starts investing their attention in other areas, their price will climb considerably.

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      Mona 1 year ago

      As it looks right now, the Metaverse is similar to a bad kid’s game, one that’s no fun at all. A lot of people were sacked just to cover some of the costs of maintaining it. This has to stop. At a certain point, a few months back, I thought Mark needed to go because things were going badly. He has turned the ship around lately and only time will tell if he’s still the right person to lead Meta.

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