Meta Platforms Inc (META.O) shares rose about 23% on Thursday and helped spark a rally in the technology sector after the Facebook owner floored Wall Street by slashing its spending forecast and boosting its stock buyback plan by $40 billion.
The company was set to add more than $90 billion to its market value and was on course to log its best day in a decade. The rally also lifted shares of Amazon.com (AMZN.O), Apple (AAPL.O) and Alphabet (GOOGL.O), all of which sport valuations of more than $1 trillion and will report earnings after market close.
Meta’s move on Wednesday to rein in costs marked a dramatic shift for a company that has spent billions of dollars to turn its vision of the futuristic metaverse into a reality, even while its core business reeled from stiff competition and a weak advertising market.
At least 24 analysts boosted their price targets on the stock after the results, with several saying that a combination of lower costs, upbeat revenue growth and share buybacks will drive up Meta’s earnings per share.
“That is rare,” analysts at Evercorse ISI said, referring to the positive developments. “And stocks react to rare.”
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