Up 32%: is the best still to come for the Meta share price?

Dismissed by AppleNew privacy settings hamper important online advertising business, and investors scorn Mark Zuckerberg’s pivot into untested Metaverse territory, Meta Platform (NASDAQ: META ) looks down and out. In November, Meta’s stock price fell by about 60% from its August 2021 peak.

With competitors like TikTok, and Metaverse, the Meta empire seems to be the first victim of the Big Tech crisis era.

However, the Meta has begun to retreat, and the view does not seem to be quiet. It has posted earnings reports and engagement numbers that exceeded analysts’ expectations, boosting its stock price by 23% in two days. Indeed, its share price has risen 32% over the past month. That snap reporting poor figures the day before contextualizes Meta’s success. So, what is this recovery caused by?

First, ongoing costs are under control. Zuckerberg promised that the company would be more proactive about cutting underperforming, or needed, jobs. He walked away from the sight of 13,000 workers being laid off from the company.

The CEO calls 2023 “The year of efficiency”. This sentiment is catnip for investors who have often perceived Meta’s sacred “Metaverse” as a white elephant.

More recently, the company announced it would buy back an additional $40bn in shares. Just hours later, the state of California threw out a case blocking Meta’s acquisition of Within, a popular virtual-reality fitness app. Both boosted Meta’s share price.

With new hardware, reduced operating costs and platforms like Instagram and WhatsApp able to withstand TikTok’s attacks, is Meta getting any worse? I tend to say yes. This turnaround is no flash in the pan: Alphabet and Microsoft they all recovered from their sharp slumps. As the economy stabilizes, and cost discipline returns, momentum returns with big tech.

This is especially true of AI, the latest technology to capture the world’s imagination. This research and development is led by private companies. And with its colossal investment and success in masterminding the Instagram Reels algorithm, Meta is well positioned to make breakthroughs in this frontier. Advances on this front have the potential to fuel the hype around the industry that has pushed share prices to record highs in 2020-21.

While Meta remains vulnerable to regulatory issues, this may be a blessing in disguise. While privacy and antitrust rulings could hurt the company, steps to ban TikTok — a growing prospect in the U.S. — will make Instagram Reels the best thing in the West.

Overall, improved economic conditions, Zuckerberg’s renewed commitment to shareholder interests and a healthy balance sheet suggest that the best is yet to come for Meta’s share price. I added the stock to my watchlist.