Meta (META) Stock Is Up, What You Need To Know

What Happened?

Shares of social network operator Meta Platforms (NASDAQ:META) jumped 4.7% in the afternoon session after investor optimism grew following positive analyst commentary and the company's announcement that it would begin showing ads on its Threads platform. 

Jefferies analysts noted the stock traded at a discount compared to Alphabet and that the high costs of AI investment were likely already factored into the price. The firm also highlighted that Meta's AI-powered ad tools had surpassed a $60 billion annual revenue run rate. Adding to the positive news, Meta announced it would start a global rollout of ads on its Threads platform, which had grown to over 400 million monthly active users. The company’s new AI lab also delivered its first key models internally, which reportedly showed a lot of promise. This combination of new monetization avenues and progress in artificial intelligence appeared to boost investor confidence in the company's direction.

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What Is The Market Telling Us

Meta’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 12.2% on the news that its third-quarter 2025 earnings report revealed a significant miss on profits due to a one-time tax charge, alongside declining margins and merely in-line revenue guidance, which overshadowed its strong sales growth. 

While the company posted a 26.2% year-over-year increase in revenue to $51.24 billion, beating analyst expectations, its reported earnings per share (EPS) of $1.05 missed estimates by 84.3%. The sharp drop in profit was due to a one-time, non-cash income tax charge of $15.93 billion. Excluding this charge, diluted EPS would have been $7.25, ahead of consensus. However, investors were also focused on other areas. The company's revenue guidance for the upcoming quarter was only in line with Wall Street expectations, suggesting growth might not accelerate further. Furthermore, profitability metrics showed some weakness, with both operating and EBITDA margins declining compared to the same quarter last year, indicating rising costs. The combination of the jarring headline profit miss and lukewarm forward guidance left investors wanting more, leading to the stock's decline.

Meta is flat since the beginning of the year, and at $646.10 per share, it is trading 18.2% below its 52-week high of $790 from August 2025. Investors who bought $1,000 worth of Meta’s shares 5 years ago would now be looking at an investment worth $2,354.

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