A record-setting day for Meta Stock as it soars 23%

Meta soars by $100 billion, adding the most value in a decade

February 2, 2023

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Whether you were Mark Zuckerberg or one of his shareholders, today was a great day.

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The stock of Facebook's parent company rose 23% on Thursday, the best daily gain in nearly a decade.

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The stock only performed better on one other day. It took one day for Meta's shares to rise 30% in July 2013.

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According to Dow Jones Market Data, the stock gained $100 billion Thursday, its largest one-day gain ever. As a result, it re-entered the top 10 largest U.S. companies by market capitalization.

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Last year, Meta was among the notable losers. Meta lost some $600 billion in market value as a result of heightened competition from TikTok and a slump in digital advertising.

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The fourth quarter of Meta's fiscal year wasn't great. In comparison to last year, the company's net profit declined by 55%. The year ahead is more important for investors, however.

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Meta noted early signs of improvement on Wednesday. According to the company, first-quarter revenue in 2023 will exceed sales in the same period in 2021, before Apple implemented privacy measures that curtailed revenue.

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In addition, Meta said it would buy back an additional $40 billion in shares.

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A broader, Fed-fueled rally in tech stocks may also be contributing. Amazon and Alphabet also saw their shares rise Thursday.

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“Does META Really Deserve To Be Up 20% In The After-Market?!” posited Evercore ISI analyst Mark Mahaney. Specifically, Mahaney wrote, "Yes." Citing "materially reduced expense projections" and a larger-than-anticipated share buyback, he raised his price target to $275 and reiterated his outperform rating.

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Rosenblatt's Barton Crockett raised the stock's rating to a buy from a hold, setting a $220 price target and saying the valuation was now "enticing." Guggenheim's Michael Morris raised the price target to $210, maintaining a buy rating.

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After firing thousands of Meta employees, Zuckerberg's commentary was well-received by analysts. A statement issued Wednesday stated that the company's management theme for 2023 is 'Year of Efficiency' and that the company is committed to becoming a stronger and more nimble organization.

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With billions poured into Meta's Reality Labs vertical, Zuckerberg, 38, has led the company's pivot toward virtual reality. The move has been criticized by analysts as well as activist investors, including Altimeter Capital's Brad Gerstner, who sees it as a distraction from the company's core advertising business.