2024-02-01 21:15:44
The technology giant Meta recently published its financial results for the fourth quarter of 2023.
● Amazon surpassed market forecasts; The stock surges in late trading
● From 6 billion dollars to a value of almost 0: this is how one of the most promising startups in the world crashed
Meta reported revenues of $40.1 billion, beating analysts’ forecasts of $39.18 billion. In the line of earnings per share, the company reported $5.33 per share, thus surpassing analysts’ forecasts of $4.96 per share. In the last year Meta’s stock grew by 158%, and now after the publication of the reports the stock is reacting with an increase of more than 12% in late trading.
Meta announced that it will pay a dividend for the first time, and also announced a $50 billion share buyback plan. The distribution of the dividend, in the amount of 50 cents per share, will join Meta with Apple, Microsoft and Oracle – all of which distribute dividends regularly.
At the center of Meta’s business these days, like other media and advertising companies, is artificial intelligence. They all want to find the best way to provide different users and advertisers with the best tools that include artificial intelligence. This is the reason for the headlines captured by the processor purchase deal between Meta and Nvidia, which is valued at $9 billion according to CNBC.
It should be mentioned that in the previous quarter, Meta’s CFO said that online commerce was the biggest contributor to growth in the advertising business. But the reason the company expanded the range of its forecasts is the uncertain situation in the Middle East, meaning the war between Israel and the terrorist organization Hamas.
AI has pushed the meta stock higher
This quarter, Meta is completing its recovery from its big fall. From its peak in September 2021 when it traded at $378 per share, the company has fallen by about 70% to about $270 per share. These days the company has grown back to $394 per share and set an all-time high the previous week. Here too, the analysts indicate that the reason for this is the artificial intelligence and not other background noises such as the Metaverse. In the previous quarter, Meta reported growth in its core business, which is the advertising market, as customers are still recovering from a difficult 2022 – when revenue declined for three straight quarters.
And what about the metaverse? Meta’s Reality Labs division, the one that is supposed to fulfill CEO Mark Zuckerberg’s dream to which he is so attached, has accumulated operating losses. It should be mentioned that the company is only losing money in this division, as it is building future technology that is not really ready for the public. On the other hand, Meta mentions in every quarter that operating losses in this division will increase year-on-year, due to development efforts Zuckerberg hopes that he will be able to integrate AI and Metaverse soon, thereby attracting more users.
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