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Why Meta Platforms Stock Was Climbing Today
Shares of Meta Platforms (META -0.07%) rose today as the social media giant benefited from a cooler-than-expected inflation report, the company’s announcement yesterday that it would lay off 5% of its staff, and the approaching TikTok ban, which could give a boost to Facebook and Instagram, the company’s top two properties.
The stock was up 4.5% as of 3 p.m. ET Wednesday.
Image source: Getty Images.
Meta benefits from a rising tide
Stocks were up broadly today in reaction to the latest news release from the Bureau of Labor Statistics. The core Consumer Price Index (CPI) rose by 3.2% in December, slightly lower than the 3.3% economists had forecast.
While Meta isn’t directly affected by interest rates, it makes its money from advertising, meaning it’s sensitive to the health of the economy and lower interest rates tend to encourage business spending.
Meanwhile, yesterday, media outlets reported that the company is planning to cut 5% of its workforce, letting go of those deemed its lowest performers. Meta stock jumped after it announced a large workforce reduction at the end of 2022, and investors seem to hope that this next round of layoffs will give a bump to profits as well.
Additionally, TikTok is set to be banned in the U.S. on Sunday, if it’s not sold in a way that meets rules or the Supreme Court doesn’t intervene. If a ban happens, users could move over to Meta’s platforms. Instagram and Facebook are already competing directly with TikTok after Meta launched Reels, its short-form video product, years ago.
What’s next for Meta stock
In the internal post disclosing the layoffs, Zuckerberg reportedly said that 2025 will be “an intense year,” alluding to possible new products or an aggressive ramp up of existing products, which could be good news for the stock.
Expect Meta stock to continue to move higher on positive economic news, and a TikTok ban would be a clear win for the stock.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
Meta Platforms, formerly known as Facebook, saw its stock climb today amidst positive news and investor optimism.
One reason for the stock’s rise is the company’s strong financial performance in recent quarters. Meta Platforms has been able to consistently beat earnings expectations and show strong revenue growth, which has boosted investor confidence in the company’s future prospects.
Additionally, Meta Platforms has been making strategic moves to diversify its business and expand into new areas. The company’s recent rebranding to Meta Platforms signals its focus on the metaverse and virtual reality, which many investors see as a promising growth opportunity.
Furthermore, positive sentiment around the broader tech sector has also contributed to Meta Platforms’ stock climb today. As tech stocks continue to outperform in the market, investors are increasingly bullish on companies like Meta Platforms that are at the forefront of innovation and technology.
Overall, today’s stock climb for Meta Platforms reflects a combination of strong financial performance, strategic moves, and positive sector sentiment that has investors feeling optimistic about the company’s future growth prospects.
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