In the wake of a challenging 2022, Meta’s shares (NASDAQ: META) have experienced a remarkable resurgence this year, following in the footsteps of other tech and AI-related stocks.
The driving force behind this remarkable upswing is the ongoing AI craze, sparked by the groundbreaking emergence of ChatGPT, a generative AI bot developed by OpenAI.
As these technologies continue to reshape industries and redefine possibilities, investors are eager to ride the wave of innovation propelling Meta and its peers to new heights.
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In continuation of this trend, Meta shares are set to hit a fresh 52-week high at the market open Thursday, July 27, after the company reported much stronger-than-expected Q2 numbers driven by its AI endeavors.
Meta stock price analysis
In particular, META was trading at $327.75 in premarket trading on Thursday, soaring 9.77%. The market pre-open surge comes after the company’s shares closed 1.4% higher a day earlier.
The latest upswing takes META stock to the highest level in a year, exceeding its previous 52-week high of $318.68.
Over the past week, Facebook owner’s shares are down around 4.6%, while on a monthly basis, the stock is 3.42% in the green.
Year-to-date, META shot up a whopping 143%, capitalizing on the mind-boggling growth in the AI sector. The company’s market cap skyrocketed by nearly $444 billion, from $321.4 billion to $765.2 billion at press time.
What’s behind the new rally?
Meta’s premarket rally on Thursday comes a day after the company reported its Q2 2023 earnings, where it issued a better-than-expected revenue guidance, stemming from the positive impact of its AI efforts on engagement and ad sales.
Analysts said Meta is now operating in a league of its own when it comes to digital ads, particularly after the social media firm projected a growth rate of between 15% to 24% in the next quarter, capturing the attention of investors and market watchers.
“Meta (is) in a class-of-their-own in digital ads,” said Mark Shmulik, an analyst at Bernstein, adding that its “monster guidance blew the doors off with an expected growth rate of +15-24% — numbers investors were hoping to maybe see as early as Q4.”
Meta’s ad revenue jumped 12% in Q2, exceeding Alphabet’s Google (NASDAQ: GOOGL), which saw only 3% growth.
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