Meta worth $200 billion more in one day

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February 2, 2024
Today at
19:26

Extensive cost savings have led to a profit explosion in the all-powerful American tech sector. Meta in particular breaks all records.

On the chip maker Nvidia

After all, all major American tech giants have published their quarterly figures. The figures week had a crushing apotheosis on Friday. Meta Platforms

, the social media group above Facebook, Instagram and WhatsApp, added $200 billion in market value in one day. This is considered the largest daily increase in value in stock market history.

Add to that the jump made by e-commerce and cloud giant Amazon

Friday after he released figures, adding more than $300 billion in stock market value. The market value of the Magnificent Seven – the collective name for Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta and Tesla – now exceeds $12 trillion, larger than the economy of any country except the US and China.

Major cost cuts boosted big tech companies’ profits in the latest quarter and helped them exceed investors’ high expectations. Tech groups will cut between 6 and 13 percent of their workforce and also cut other costs by 2023, despite the good prospects in their sector. This has greatly increased margins. Meta Platforms saw profits triple compared to a year earlier. Based on that performance, the company will pay out a quarterly dividend to its shareholders for the first time.

Bubble or not?

Some warn that the increased valuations could lead to a bubble, while others qualify this. ‘The profits of the large tech groups have risen even more than their stock prices in the past two years. They are essentially trading cheaper than they were then,” said Ron Temple, a strategist at the asset manager Lazard.

Microsoft

hit Apple last week

as the most valuable company in the world. It has a market capitalization of $3 trillion. The software giant achieved strong growth with its cloud service, while Apple is struggling with poor sales figures in China. Alphabet

was the only real miss in the list on Tuesday evening due to disappointing advertising revenues at Google and higher than expected investment expenditures to keep up with leader Microsoft in the race around artificial intelligence.

The triumph of the big tech players was less visible at index level. A strong US jobs report on Friday reminded investors of the continued strength of the US labor market and reduced the chance that the US central bank (Fed) will cut interest rates soon. That dampened the buying spirit on the broad market. The Bel20 even closed slightly negatively.

The article is in Dutch

Tags: Meta worth billion day

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