Meta Stock Soars: A Financial and Sentiment Analysis
Written by Jack Leonard
News about Meta:
On February 2, 2024, Meta, previously known as Facebook, saw a 20% rise in its stock price after the company reported its first-ever cash dividend. This produced the biggest jump in Meta’s history. Their stock shot up from $394.78 on Thursday to $470.99 on Friday upon opening. On this same day, the company’s market cap also rose nearly $200 billion, making their new market cap north of $1.2 trillion. With such a monumental rise, it’s important to take a step back and recap.
Financial Analysis:
One of the biggest reasons for Meta’s jump was their increased efficiency. Despite the company's giant layoffs, Zuckerberg has stated that his company’s “leaner” business model allows for continued growth. With the development of Meta’s AI-powered chatbots, this increased efficiency brought increased revenues as seen in Q4. Zuckerberg plans to continue his institutional investment into deep learning and artificial intelligence into the remainder of 2024.
3 weeks ago, he unveiled his plan for combining both the Generative AI and Fundamental AI Research (FAIR) teams in Meta fueled by an influx of 350,000 Nvidia H100 computing chips. This has led to increased ad revenue and the company's first-ever announcement of quarterly dividends set at 50 cents per share. Mainstream financial analysts rate the company as a “buy”.
Sentiment Analysis:
However, while Meta seems to be doing well and investors are pleased, analysts question whether their fame and glory will last. According to Yahoo Finance, Meta is a bearish stock with a bad performance outlook. They face fierce competition with X, TikTok, and Apple. The launch of Apple’s new Vision Pro, the counterpart to the Meta Quest 3, could also seriously affect Meta and their stock, due to the superiority of the Vision Pro. Its M2 chip and 23 million pixels are some of the biggest and best specs of the Vision Pro, however these aren’t even the main reasons problems could emerge for Zuckerburg.
The main reason why it could be a problem is because of Apple's following and its influence. Apple for many years has been the dominant space in technology, selling out its inventory on launch day. In terms of popularity, Meta stands no chance against Apple, maybe jeopardizing their chance at being the dominant leader in the AI space. Finally, like many other stocks, it may be too late to join the gravy train. While Meta seemed to have a good start to the year, it wouldn’t be surprising if it were to fall back down slowly.
To end, let me ask this question.
Is Meta still the meta?
Jack Leonard is an 11th-grader from Broward County. He’s passionate about retail estate management and finance.
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