April 27 (Reuters) – Meta Platforms Inc ( META.O ) is back again, a Wall Street darling.
The company’s shares extended their winning streak on Thursday, rising nearly 14% after investors cheered Meta’s focus on artificial intelligence and cost-cutting, whose enthusiasm for social media nearly doubled in 2023. Doubling helped.
Meta, whose shares are trading at year-highs, is looking to add nearly $80 billion to its market valuation and overtake Nvidia Corp ( NVDA.O ) as the top-performing company in the S&P 500 (.SPX). Ready to move on. in annual terms. Its history if the victory is held.
The rally also lifted other tech companies, from Snap Inc ( SNAP.N ) and Pinterest Inc ( PINS.N ) to Amazon.com Inc ( AMZN.O ), which rose 3.1%.
Mark Schmulek, an analyst at Bernstein, said: “If you want to be treated and valued as a growth fund, you have to grow! And those are the meta growth returns…as are the potential downsides.” Questions are asked about the note. ,
Schmulek was one of 27 analysts who raised their Meta price targets, pushing the average price to $270, up nearly 13% for the stock, which is already the biggest gainer among big tech companies this year.
The Meta beat expectations on first-quarter profit and revenue that rose for the first time in nearly a year, signs that the U.S. tech giant is emerging from a recession that has seen thousands of layoffs.
The results also underscore the growing importance of artificial intelligence, with CEO Mark Zuckerberg saying the technology is helping to drive traffic to Facebook and Instagram and drive more ad sales.
“We believe AI has helped transform Meta from a limited display of content from friends, family and followers to an almost limitless pool of recommended content that is now available across all reels and feeds,” C Morgan analysts said.
Zuckerberg also said the company, which has made several costly upgrades to strengthen its core business, is keeping up with building its AI infrastructure.
Rohit Kulkarni of Roth MKM said: “A year of efficiency paves the way for an attack by MI.”
However, some investors were concerned about the stock’s rally.
The results were better than expected, said Eric Schaefer, CEO of private equity firm The Patriarch Organization, but they came at a time when expectations were low and valuations were very high given the economic outlook.
Shares of America’s biggest technology companies, including Apple Inc ( AAPL.O ), Microsoft Corp ( MSFT.O ), Amazon and Alphabet Inc ( GOOGL.O ), have gained nearly a quarter so far this year after a weak 2022.
“Big tech companies could have a tough second half,” Schaefer said, adding that this is a good time for investors to sell their shares.
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