Meta Platforms Stock Earnings and Forecast: Zuckerberg's META jumps nearly 12% on Q1 slam dunk
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- Meta Platforms bested Wall Street late Wednesday.
- META stock rose nearly 12% afterhours.
- Zuckerberg touted company's AI and metaverse advances.
- User growth is slow but picking up strength.
Meta Platforms (META) bolted 11.7% higher afterhours on Wednesday following a first quarter earnings report that showed renewed user growth and better than expected profitability. Meta saw better user data than recent quarters across its Family of Apps – which includes Facebook, Instagram, WhatsApp and other properties. CEO Mark Zuckerberg reiterated his vision for the metaverse even while Meta's Facebook platform performed the heavy lifting in the quarter.
The NASDAQ 100 futures are ahead 0.7% in Thursday's premarket as Meta's positive results come after earlier success in the week from Microsoft (MSFT) and Alphabet (GOOGL).
Meta Platforms stock news: Zuckerberg touts AI gains
Meta's first quarter earnings per share (EPS) of $2.20 beat Wall Street consensus by 23 cents or more than 10%. Revenue for the quarter of $28.65 billion also surpassed analysts by nearly $1 billion but rose just 2.7% from the same quarter one year ago. The market discarded the slow growth in favor of a focus on a better takeup in digital ads. Ad impressions rose 26% YoY, while average prices per ad dropped 17%.
Facebook daily active users increased 4% YoY to 2.04 billion on average in March. Across the Family of Apps, average users in March reached 3.02 billion – up 5% YoY.
Zuckerberg impressed the market by pushing the second quarter revenue outlook to a range of $29.5 billion to $32 billion. The bottom side of that range was $30 million above existing consensus.
The real juice began flowing when Zuckerberg began talking not about the metaverse but rather about artificial intelligence.
"First, the massive recommendations and ranking infrastructure that powers all of our products from Feed to Reels to our ad system to our integrity systems, and that we've been working on for many, many years," Zuckerberg said. "Second, the new generative foundation models that are enabling entirely new classes of products and experiences."
Concerning the first of these intiatives, Zuckerberg said that AI had helped the efficiency of monetization to increase by 30% on Instagram and 40% on Facebook from just the previous quarter.
Zuckerberg said he was not forgetting about his vision for the metaverse but that heavy investment in AI over recent years would allow the company to be competitive on the generative AI front as well.
Meta Platforms stock forecast
Since META stock bottomed in early November of last year, just six months ago, it has returned a stunning 165%. That is quite the turnaround for any stock, let alone one of the biggest companies in the world. Bulls likely still have more room to run however. The next challen will be pushing ahead to the heavy volume ledge between $240 and $250. This area had plenty of both resistance and support for the price action between the summer of 2020 and March 2021. Seeing as how the Relative Strength Index (RSI) is now near overbought territory, Meta Platforms stock has little in the way of support until $200. Expect some pushback in the near future once last autumn's buyers decide to book some profits.
META weekly chart
