Meta's stock shot up about 25 percent on Thursday — its biggest jump in nearly a decade — following the release of earnings that showed changing fortunes for the embattled tech giant. The rally adds around $100 million in value to the company's market cap, which is still down 40 percent from a year ago.
Why the vote of confidence from investors? There are few possible explanations:
- Revenue was above analysts' estimates.
- Meta's forecast for the first quarter was higher than expected.
- The company announced $40 billion in share buybacks.
Finally, a federal judge on Wednesday rejected the Federal Trade Commission's request to stop Meta from acquiring a virtual reality startup called Within, effectively clearing the way for the company to pursue its ongoing pivot to the metaverse.
In addition, the tech sector overall is benefiting from a fresh wave of bullish sentiment, fueled in part by the Federal Reserve's decision on Wednesday to slow the pace of rate hikes.
Another winner was Coinbase, which saw its shares rise 20 percent Thursday morning after a judge dismissed a class-action lawsuit around the crypto exchange's custody practices.
Whether the tech rally has legs remains to be seen. One big test will be the release of quarterly earnings from Apple, Amazon, and Google parent Alphabet after the bell Thursday.
To varying degrees, each company has struggled to find its footing in recent months amid widespread economic uncertainty, supply chain disruptions, and legal challenges.
After-hours trading will likely offer a hint to how markets — and tech — will close out the week.
