Meta shares were soaring in the US premarket on Friday as the technology group announced earnings growth that beat expectations and please investors with news of its first quarterly dividend.
Meta has been the standout of the mega tech earnings season so far. Not because of underlying earnings – although they were good – but because Facebook-owner Meta announced its first quarterly dividend.
For many, it will mark the transition from a growth company to a portfolio pillar providing regular income.
As with all ‘Magnificent 7’ technology stocks, the company was all to pleased to reveal progress in the roll out of AI across the burins and now sees it as a core growth opportunity alongside the questionable Metaverse.
“We had a good quarter as our community and business continue to grow,” said Mark Zuckerberg, Meta founder and CEO. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”
Meta’s shares have been on an astronomical run since lows around $90 in November 2022. Last night’s announcement has sent the stock another 21% higher to $479.
“Meta has seen a remarkable share price jump, as it announced its first ever quarterly dividend and a hefty share buyback. The topping of estimates also came as a very welcome surprise – the advertising revenue landscape remains very lumpy and Meta’s navigating this well,” said Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown.
“The potency of its offering is clear to see, with advertising impressions rising by a fifth, and price increases are tapering to more customer-friendly levels. The returning of cash to shareholders is a bold and well-regarded move. The amount of free cash pumping through the business means it’s more than able to afford it, and it helps pay investors for their patience as Meta works out the next generation of growth and all the Metaverse entails.”
