As of February 11, 2025, the stock price of $Meta Platforms, Inc.(META)$ has risen for 16 consecutive trading days (from January 17 to February 10). This streak marks the longest continuous increase in Meta's history.
Since January 20, 2025, Meta's stock price has surged by 17%.
Stock Price Fluctuations Breakdown:
Capex Signals Amid Negative News: January 17 was an interesting turning point. On January 14 (Tuesday), there was a significant outflow from TikTok to Xiaohongshu, causing $Meta Platforms, Inc.(META)$ 's stock to plummet by 2.3%. On January 17 (Friday), the last trading day before the TikTok ban, Meta's stock reversed from a downward trend to a 0.24% gain. The following Monday, after TikTok received a 75-day exemption, Meta's stock closed higher, signaling that the market had absorbed the impact of the TikTok incident.
Gaining Confidence Against the Trend: On January 27, DeepSeek's impact on the US stock market caused $NVIDIA(NVDA)$ to drop, but Meta defied the trend by rising nearly 2% with increased trading volume. The next day, $Meta Platforms, Inc.(META)$ continued to rise by 2%, gaining significant market confidence. In response to DeepSeek, Zuckerberg acted promptly by establishing four war rooms to study DeepSeek and committing to increased Capex to release a more powerful Llama model this quarter. DeepSeek's emergence led the market to re-evaluate the AI open-source ecosystem. Compared to ChatGPT, which was previously criticized for being "closed," Llama unexpectedly benefited.
Interestingly, a joke circulated that day, stating that the development cost of DeepSeek was equivalent to the annual salary of a Meta AI executive, causing panic within Meta—this contrasted sharply with the market's positive reaction.
The Importance of Peer Comparison: In the past three weeks, there have been numerous significant events, with Mag7 companies facing major fundamental headwinds. In comparison, Meta has emerged as a safe bet, charting an independent course.
Embracing the AI Narrative: By increasing Capex and developing open-source models, Meta has actively integrated into the current AI storyline. Additionally, Zuckerberg's outreach to Trump can be seen as a form of alignment with the MAGA movement—though not central, it is at least not antagonistic, and the stance is clear.
Fundamental Support:
AI Business Momentum: Meta's investments and achievements in AI have been well-received by the market. Its AI-driven ad products, such as Advantage+ shopping services, have seen a 70% quarter-over-quarter growth and have reached a $20 billion annual revenue run rate.
Strong Financial Performance: Meta's financial results for Q4 2024 exceeded market expectations, with a 25% increase in revenue to $40.1 billion. Additionally, the company announced its first quarterly dividend.
Earnings Report: Meta's latest earnings report showed revenue and profit exceeding expectations, especially in advertising revenue (with a 21% increase in ad impressions and a 2% increase in ad prices) and strong user growth, which enhanced investor confidence.
Cost Control: The company effectively reduced operating costs through layoffs and cuts to non-core projects, improving profitability.
AI Technology: Meta's continuous investment in AI, particularly in ad recommendations and content distribution, has improved platform efficiency and user experience.
Metaverse Progress: Although the metaverse business is still incurring losses, progress in related technologies and its future potential have attracted long-term investor attention.
Market Reaction:
Analyst Target Price Upgrades: Several banks and analysts have upgraded their ratings and target prices for $Meta Platforms, Inc.(META)$ . For example, Barclays raised Meta's target price to $705, while Benchmark upgraded its rating to "buy" with a target price of $820.
Investor Confidence: The stock's upward trend also reflects investor confidence in Meta's AI strategy. Despite plans to increase AI spending by about 50% in 2025, the market has not shown concern.
Positive Market Sentiment: Despite concerns over AI investments by other tech giants like $Microsoft(MSFT)$ and $NVIDIA(NVDA)$ , Meta's stock has remained resilient.
Future Outlook:
Looking Ahead: The market needs more catalysts. From a weekly perspective, the recent two weeks have seen a decrease in trading volume despite the upward trend, and an adjustment this week is highly likely.
Market Trends: The overall trend will be influenced by two key factors: whether macroeconomic data will again disappoint the market and whether Trump will make any unexpected moves. These factors will impact the performance of the entire MAG7 group.
News Flow: $Meta Platforms, Inc.(META)$ itself needs more substantial positive news. Meta's stock is likely to continue its upward trend, especially with the ongoing growth of its AI and advertising businesses.
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