UBS analysts raised their price targets on Meta Platforms (NASDAQ:META) stock to $635 per share, reaffirming their “buy” rating on the back of stellar second-quarter earnings.
Meta earned $13.46 billion, $5.16 per share, on revenue of $39 billion during the quarter ending in June. The company reported after the market closed yesterday. Earnings were up 73%, and revenue was up 22% from a year ago. All the numbers beat analyst estimates.
META stock was trading early today at $502 per share, up about $30 or 6% on the day.
All Hail King Zuck
Investors chose to ignore the company’s warning that it faces significant capital expenditure (capex) increases next year.
Instead, they focused on its gains in the digital ad market, where it grew twice as fast as Google’s parent Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Chief Financial Officer Susan Li said ad sales were strongest in the Asia-Pacific region.
Meta’s expenses of $24.2 billion included its $1.4 billion settlement with Texas over its use of facial recognition data.
Meta said it had 3.27 billion daily active users across its Facebook, Instagram, and Messenger platforms. It continued to benefit from cost-cutting that began in 2022 and has resulted in 22,000 layoffs.
CEO Mark Zuckerberg said the company’s Meta artificial intelligence (AI) software “is on track to be the most used AI assistant in the world by the end of the year.” Unlike rivals, it uses an open source development model.
The results buoyed the whole market today, cited as proof that the vast AI investments of the last year are paying off.
META Stock: What Happens Next?
Zuckerberg’s vision made Facebook the winner in social networking and cloud storage, with 25 data centers worldwide. While the metaverse never took off, Meta looks set to be a winner in AI as well. Forbes estimated Zuckerberg’s fortune at $177 billion.
Not bad for someone who just turned 40 this year.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
