In the backdrop of a dynamic 2023 for mega-cap stocks, Facebook parent Meta Platforms, Inc. (NASDAQ:META), part of the esteemed “Magnificent Seven,” emerged as a standout performer, echoing the success of AI-leveraged chipmaker Nvidia.
In fact, the stock is on track for its best year ever. So, what factors contributed to all this?
Stock Trajectory:
Meta’s stock rally, prevalent during the COVID-19 years, encountered a stall in September 2021, initiating a year-long secular downtrend until early November 2022. The downturn reflected declines in both top and bottom-line figures due to an ad spending slowdown amid challenging economic conditions. Challenges from the loss-making Reality Labs division, Apple‘s privacy initiatives, and the competitive threat from TikTok further impacted the company.
Chart Courtesy of Benzinga
Resuscitation Measures:
Amid these challenges, Meta unveiled strategic plans to streamline operations and navigate through adverse conditions. In November, the company announced a significant workforce reduction, eliminating 11,000 employees as the initial step.
In a letter to employees detailing the layoffs, CEO Mark Zuckerberg outlined additional measures, including desk sharing for remote workers, infrastructure review for spending cuts, and a hiring freeze until the first quarter of 2023. The market responded positively to these resuscitation measures, leading to a rebound in Meta’s stock from its six-year low.
Performance Highlights:
Despite the hurdles, Meta emerged as the second-best-performing S&P 500 stock in 2023, boasting a year-to-date gain of 190%, its best-ever performance. It outperformed both the S&P 500 and the Nasdaq Composite Index during the same period.
Despite the recovery, the stock is trading below its all-time high (intraday) of $383.79.
Chart Courtesy of Benzinga
See Also: How To Buy Meta (Formerly Facebook) Stock
‘Year Of Efficiency’
In the quarterly earnings report for the fourth quarter of 2022, released on Feb. 1, 2023, Zuckerberg emphasized the management theme for 2023 as the “Year of Efficiency,” focusing on building a stronger and more nimble organization.
During this period, Meta’s flagship Facebook platform’s daily active user metric rebounded, reaching the 2-million mark, which the company attributed to its AI…
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