Meta, Facebook's parent company, avoids a rate tumult that's shaking tech stocks

The Nasdaq 100 Stock Index has lost roughly $700 billion in market value this week, but Facebook parent Meta Platforms Inc. has escaped relatively untouched.
 
WAN CHAI, Hong Kong - Jan. 26, 2022 - PRLog -- The Nasdaq 100 Stock Index has lost roughly $700 billion in market value this week, but Facebook parent Meta Platforms Inc. has escaped relatively untouched.

The stock has lost just 1% since the beginning of the year, while other megacaps, such as Google parent Alphabet Inc. and Microsoft Corp., have had their worst weeks since the early days of the Covid-19 outbreak, owing to rising Treasury yields. On Friday, Meta shares rose as high as 1.4 percent before falling 0.2 percent.

Meta's resiliency is somewhat of a turnaround after its stock has been under pressure for months due to increasing scrutiny of its social-media platforms. Based on earnings predicted over the next 12 months, the stock has dropped 13% from its September peak, making it the cheapest of the so-called Faamg cohort, which also includes Amazon.com Inc. and Apple Inc. According to statistics provided by Bloomberg, Meta is trading at a discount of nearly 20% to the Nasdaq 100 average at 22 times anticipated profits.

According to statistics provided by Bloomberg, Facebook is expected to have the fastest revenue growth among Faamg stocks in 2022, with a 19% increase. According to UBS, such projections are likely underestimating the company's revenue growth potential if a revised Instagram newsfeed, which is now being tested, is broadly implemented and takes momentum.

"Drawing from a larger content base might enable a big rise in engagement, similar to TikTok," analyst Lloyd Walmsley said in a research note on Thursday, upping his stock price objective to $440 from $425.

According to statistics provided by Bloomberg, the average price target on Wall Street for Meta shares is $400, implying a possible increase of nearly 20% so long as conditions for a push are satisfied. More traders are looking forward to such movement from Meta share as the potential of the stock is proven to be strong enough.

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