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Meta stock pops 20% after earnings despite possible headwinds on the horizon

Dino Kurbegovic

Facebook parent Meta Platforms (NASDAQ: FB) jumped 20% in after-hours trading following the announcement of its first-quarter earnings. Relief in the stock likely comes as profit and daily user numbers came in ahead of expectations while revenue fell short of expectations.   

CEO Mark Zuckerberg kicked off the earnings meeting with a key change by noting that the company would be slowing some investments to reflect what the executives are seeing in the company’s growth.  

The positive news was well received by the market since other digital ad peers also jumped along with FB stock in post-market trading. 

Founder and CEO of Compound Capital Advisors, Charlie Bilello shared the news on his Twitter page:

“Update: Facebook is up 20% in after hours trading after reporting earnings. When nothing but bad news is priced in, any hint of good news can lead to a spike higher.”

Source: Nasdaq

Big changes coming for Meta

Whatsmore, Zuckerberg’s announced change was not the only one, Bilello also noted some changes that FB is going through. 

“Facebook revenues increased 7% over the prior year, the slowest YoY growth rate in the company’s history. Meanwhile, its shares are up 20% in after-hours trading. It’s not the news but the reaction to the news that matters, revealing what good/bad news was priced in.”

Source: Twitter

Additionally, he shared insights on how the number of monthly users in Q1 has changed over the years:

Whether these changes will be sniffed out by market participants and the stock punished will probably be more evident once the market opens. The guidance offered by the company is slightly below expectations with the most worrying factor mentioned being the war in Ukraine

Sentiment for tech stock is currently on the lower side so caution should be the keyword for market participants. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

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