Meta spreads cheer on Wall Street as Facebook adds more users

Shares of Meta Platforms Inc (FB.O) rose 17 per cent in a relief rally on Thursday after having lost nearly half their value this year, as the social media giant surprised Wall Street with a better-than-expected rise in users joining the platform.

The stock helped lift the tech-heavy Nasdaq in premarket trading, spreading cheer to several internet and technology names. Apple, Amazon and Alphabet were all up more than 2 per cent.

“Investors seem to be clamouring for good news and Meta’s results coming within touching distance of expectations scratched that itch,” said Laura Hoy, equity analyst at Hargreaves Lansdown.

Analysts appeared mixed in their views on the results. At least five brokerages cut their price targets on the stock, while three raised their expectations.

Of the 63 analysts covering the stock, 46 have a “buy” or higher rating and only two analysts rate the stock “sell” or lower. The median price target on the stock is $300, well above its current trading price of $200.

Facebook’s daily active users (DAU), a key metric for advertisers, came in at 1.96 billion, slightly higher than the estimate of 1.95 billion.

While that was enough to send the shares soaring, Wall Street analysts took a more cautious tone, citing worries ranging from the war in Ukraine, Apple’s App Store policy changes to competition from ByteDance’s TikTok.

“We do not believe the overall FB business has changed much over the past 90 days, but headwinds related to iOS changes, TikTok competition & Reels monetization are better understood,” J.P Morgan’s lead analyst Doug Anmuth said in a note.