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Key Takeaways
- Meta shares jumped after the tech giant delivered a better-than-expected quarterly earnings report and announced a dividend payment and increased authorization for share buybacks.
- The company reiterated its focus on investing in AI infrastructure and growing its metaverse business.
- Meta shares have trended sharply higher after breaking above an ascending triangle, with the stock’s prior record high now becoming an area of future price support during retracements.
Meta Platforms, Inc.
Source: TradingView.com.
Shares in Facebook-parent Meta Platforms (META) jumped more than 17% ahead of the opening bell Friday after the Magnificent Seven member delivered a better-than-expected fourth-quarter earnings report on the back of a rebound in ad sales and announced its first-ever dividend payment, along with authorization for additional stock buybacks.
The $1 trillion tech giant said it will issue investors a dividend of 50 cents a share on March 26 and has authorized a $50 billion increase in its stock repurchase plan. Public companies typically use both dividend payments and share buybacks to return excess profits to investors.
The company reiterated its focus on artificial intelligence (AI) and the metaverse. “We’ve made a lot of progress on our vision for advancing AI and the metaverse,” Meta founder and CEO Mark Zuckerberg said in the company’s earnings statement. “We expect our ambitious long-term AI research and product development efforts will require growing infrastructure investments beyond this year,” he added.
Last month, the Meta chief shared an Instagram video saying the company planned to purchase $9 billion of Nvidia’s (NVDA) chips this year to scale its AI computing power. Despite the company’s foray into the metaverse, its Reality Labs division recorded a loss in the period of $4.65 billion. However, the unit’s revenue of $1.1 billion surpassed the $804 million analysts had expected thanks to strong holiday sales of the company’s Quest VR headset. On the hiring front, Zuckerberg said he expects new additions to be minimal in 2024, with a focus on adding staff to areas of the company that will see increased investment.
META shares have continued to trend sharply higher since breaking above an ascending triangle—a chart pattern that indicates a continuation of the current trend. While earnings-driven gains are likely to take the stock into uncharted upside territory today, it’s work keeping an eye on Meta’s previous record high around $384 set in September 2021 as an potential area of future price support during retracements or corrections.
Meta shares were up 17.1% at $462.35 at about 7:50 a.m. ET. The stock price has more than doubled over the past year.
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