Meta’s (NASDAQ: META) shares embarked on a rollercoaster journey on Wednesday, October 25, as the tech behemoth unveiled its Q3 2023 financial results. Impressively, the company outperformed Wall Street expectations, boasting a robust year-over-year revenue surge of 23%, marking its most substantial growth since 2021.
However, what followed wasn’t quite the investor reaction one might anticipate. Mere minutes before the earnings report hit the wires, META inexplicably tumbled 5% without any apparent catalyst. This sudden dip was swiftly recuperated just moments before the financial results were finally disclosed.
After the earnings announcement, Meta’s stock took another 5% nosedive, then recovered by 5%, only to close the session 4% lower at $299.53. This tumultuous ride accounted for over $110 billion in market cap fluctuations in less than an hour.
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The sharp and erratic movements might be attributed to Meta’s CFO, Susan Li, who, during the earnings call, warned of potentially softer ad revenues and expanded the revenue guidance range for the Q4, citing the ongoing tensions stemming from the Middle East.
Wall Street’s forecasts for META
Although the market’s response to Meta Platforms’ earnings was unusual, the company’s Q3 report undoubtedly demonstrated solid fundamentals.
While most of its revenues and profits were fueled by a continued rebound in its advertising business, the Facebook owner continues to invest heavily in the metaverse and artificial intelligence (AI) technologies.
The company’s CEO and co-Foudner Mark Zuckerberg closed out the earnings call saying AI will ‘transform’ how people use Meta’s apps.
The optimism around the tech stock is reflected in analysts’ price targets. Notably, Wall Street’s average 12-month price objective for META currently stands at $379.90, implying around 26.8% further upside compared to the current share price.
The price target is based on 43 strategists who covered META in the last three months.
Additionally, the stock has an average analyst rating of ‘Strong Buy,’ based on 41 ‘Buy’ recommendations, while 2 advised a ‘Hold.’
Latest analysts’ views
In the latest Wall Street developments, Oppenheimer strategists reaffirmed their bullish views on META in the wake of the Q3 report, citing “continued revenue outperformance and cost control, despite the conservative low end of 4Q guide on the Middle East.”
At the same time, analysts at Goldman Sachs said Meta’s shares remain “well-positioned against several long-term secular growth themes and are encouraged by the positive momentum across key product initiatives” including Reels, click-to-messaging ads, and the company’s AI efforts.
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