(Bloomberg) — A spectacular turnaround in Meta Platforms Inc.’s stock is bringing back flashes of Big Tech heydays.
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The Facebook owner’s recovery in market value since a November low is set to surpass $200 billion when US trading opens. The shares surged as much as 20% in premarket trading after Chief Executive Officer Mark Zuckerberg pledged Wednesday to make the social media company leaner. Analysts welcomed the move, with some hiking price targets by more than $70 after the earnings report.
Thursday’s gains come almost a year to the day since Meta posted the worst one-day crash in stock market history. The advance will add to Meta’s 72% rebound since Nov. 3, cementing its place as the best-performing stock on the S&P 500 Index in the last three months.
“In future years we will probably look back at 2023 as the sentiment shift for META shares,” Barclays Plc analyst Ross Sandler wrote in a note, raising the price target to $260 from $165.
To be sure, there was plenty of room for reversal after Meta’s worst year as a public company. This time last year, the Facebook owner plunged 26% on the back of disappointing earnings results, erasing about $250 billion in market value, the biggest wipeout in stock market history.
The stock is still about 60% below its 2021 peak, but analysts see a bull case building after the company’s latest update. Meta’s market value was $397 billion as of Wednesday’s close.
Morgan Stanley analyst Brian Nowak noted that there was “an impressive sea change” at Meta, and increased his price target on the shares to $190 from $130.
“Meta’s cultural change focused on efficiency” is leading to lower costs while investments are driving faster revenue growth, Nowak wrote in a note.
–With assistance from Kit Rees and James Cone.
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